In its 2018/19 Full Year Financial Results, published on August 16, 2019, Newcrest Mining (ASX: NCM) announced that it has started a process aimed at divesting a least a 26% interest from its current 75% ownership of the Gosowong gold operation in Indonesia.
The move comes after the Joko Widodo government issued last year a mandate stating that major mines such as Gosowong or Freeport-McMoRan’s (NYSE:FCX) Grasberg have to be at least 51% owned by Indonesian companies.
“Newcrest’s 75% owned Indonesian subsidiary, PT Nusa Halmahera Minerals (PTNHM), entered into an agreement with the Government of Indonesia to amend the Gosowong Contract of Work (CoW). A key amendment to the CoW included a requirement that Indonesian parties own at least 51% of PTNHM within two years of signing the amendment agreement,” the report reads.
According to the Australian Financial Review, an auction for the interest in the $246-million asset is already underway and a transaction should be completed before the miner’s deadline to divest, which is set for June 2020.
Gosowong is located on Halmahera Island, about 2,450 kilometres northeast of the national capital, Jakarta. It is a gold (epithermal and epithermal – low sulfidation) deposit, with additional occurrences of silver.
Through the year ended on June 30, the underground operation produced 190,000 ounces of gold and generated $29 million in free cash.