Newmont Mining (NEM) has entered into a binding share sale and purchase agreement with PT Amman Mineral Internasional (PT AMI) to sell its interests in PT Newmont Nusa Tenggara (PTNNT), which operates the Batu Hijau copper and gold mine in Indonesia.

The total consideration is $1.3bn for Newmont’s 48.5 percent economic interest in PTNNT. This amount is comprised of cash proceeds of $920 million expected to be paid at closing and contingent payments of $403 million tied to metal price upside and development of Elang.

Nusa Tenggara Mining Corporation, majority owned by Sumitomo Corporation, has also agreed to sell its ownership stake to PT AMI.

"Selling our stake in PTNNT for fair value is aligned with our strategic priorities to lower debt, fund our highest margin projects and create value for shareholders," said Gary Goldberg, President and Chief Executive Officer.

"We believe PT AMI, supported by Batu Hijau’s experienced team, will be well positioned to continue operating the asset successfully. We acknowledge and thank Batu Hijau’s employees, the government of Indonesia and our valued partner Sumitomo for their support as we work to execute a successful sale and transition."

The transaction is expected to close in the third quarter following receipt of regulatory approvals and satisfaction of other conditions precedent.

These conditions include government approval of the PTNNT share transfer; a valid export license at closing; concurrent closing of PT Multi Daerah Bersaing’s (PTMDB) sale of its 24 percent stake to the buyers; resolution of certain tax matters; and no material adverse events that would substantially impact the future value of Batu Hijau.

Newmont has delivered significant safety and profitability improvements at its operations, and strengthened its portfolio and balance sheet over the last three years.

The Company has generated $1.9 billion in proceeds from the sale of non-core assets and lowered net debt by 37 percent since 2013 while continuing to invest in profitable growth. Newmont acquired Cripple Creek & Victor in Colorado and added five million ounces of gold reserves by the drill bit in 2015.

The Company is also advancing four profitable development projects in the US, Australia and Suriname which are expected to add up to one million ounces of profitable production over the next two years.

Newmont is a leading gold and copper producer. The Company’s operations are primarily in the United States, Australia, Ghana, Peru, Indonesia and Suriname.

Newmont is the only gold producer listed in the S&P 500 Index and was named the mining industry leader by the Dow Jones Sustainability World Index in 2015.