Newcrest Mining has completed its sale of the Gosowong gold-silver mine in North Maluku, Indonesia in accordance to a new divestment rule in the country.
Indonesia’s Department of Mines and Energy rules that the citizens should at least own a 51 per cent stake in a mining project.
This presented a challenge to Newcrest, which owned a 75 per cent interest in Gosowong’s mining operator, PT Nusa Halmahera Minerals.
Newcrest offloaded the mine by divesting Newcrest Singapore to Indotan Halmahera Bangkit for $90 million, of which $60 million has been received. The remaining $30 million is payable in 18 months.
Newcrest expected to recognise a $44 million loss on divestment.
Newcrest managing director and chief executive Sandeep Biswas said in February that this outcome delivered the best value for Newcrest shareholders and gave Gosowong’s employees and community a clear future path.
“Gosowong has been a valued part of our operating portfolio since we discovered it in 1993, with first production commencing in 1999,” Biswas said.
“I would like to extend my sincere thanks to all our Gosowong employees who have contributed so much to the success of Gosowong and Newcrest over the past few decades.”
Newcrest produced 190,000 tonnes of gold at an all-in sustaining cost of $1099 per ounce at Gosowong in the 2019 financial year.
North Maluku is 2450 kilometres from Indonesia’s capital city, Jakarta.