Indonesia local govt picks investor for Newmont sale

JAKARTA, July 11 (Reuters) - A consortium of three local governments in Indonesia have appointed PT Multicapital to help finance the purchase of a 10 percent stake in a unit of Newmont Mining Corp (NEM.N), a local mining official said on Saturday.

The governments of West Nusa Tenggara province, West Sumbawa regency and Sumbawa regency, the three areas where the mine is located, and Multicapital would form a joint venture company to negotiate a price with Newmont, Heryadi Rachmat, the head of West Nusa Tenggara provincial mining office, said.

"Out of six potential investors, we find Multicapital to have the best interest for the local government and a good track record in investment," Rachmat told Reuters by telephone.

There was an inittial agreement for the local governments and Multicapital to split revenue 25 percent and 75 percent respectively, Rachmat said without elaborating.

Local media has reported Multicapital is a subsidiary of PT Bumi Resources (BUMI.JK), Indonesia's biggest coal miner. A Bumi spokesman could not immediately be reached for comment.

Bumi has previously tried to buy shares in PT Newmont Nusa Tenggara, which operates the Batu Hijau copper and gold mine in Sumbawa island, eastern Indonesia.

Last year Bumi, which is linked to the family business of Indonesia's welfare minister Aburizal Bakrie, entered an initial agreement to buy 31 percent of Newmont's local unit.

Under a memorandum of understanding, the governments of Sumbawa regency, Sumbawa Barat regency and Nusa Tenggara Barat would buy the shares but turn them over to Bumi.The deal did not materialise.

The new investment plans follows a prolonged dispute between foreign shareholders at PT Newmont Nusa Tenggara (NNT) and the government over divestiture obligation.