Indonesia's government and PT Newmont Nusa Tenggara (NNT), a local unit of Newmont Mining Corp, have agreed to value NNT's assets at $3.52 billion, the country's energy minister said on Thursday.

The agreement paves the way for NNT's foreign owners to sell some of their shares in NNT, which operates the Batu Hijau copper and gold mine in Sumbawa island, eastern Indonesia. Newmont had earlier valued NNT's assets at $4.9 billion.

An arbitration court in late March ordered the foreign shareholders to sell part of their stake to local investors or to the government within six months, resolving a long-running dispute over ownership of the mine.

This (the valuation) is a good result, minister Purnomo Yusgiantoro, told reporters.

He said his office had sent a letter to the ministry of finance requesting whether or not the government would buy a stake in NNT.

The Newmont case was seen as an important test for Indonesia, which needs to attract foreign investment into sectors such as mining to drive economic growth and create jobs.

I confirm that there is an agreement with the government of Indonesia about the asset price of $3.52 billion, Rubi Purnomo, the spokesman for Newmont in Indonesia, said.

Yusgiantoro said that if the government declines to buy a stake in the Newmont unit, it will be offered to the regional government instead.

Since the divestment (programme) started in 2001, the central government has never bought the shares. The government has 30 days to decide whether to buy or not, Yusgiantoro said.

Indonesia's West Nusa Tenggara province has said it wants to buy more shares in a local unit of Newmont after it agreed to a financing deal to buy a 10 percent stake.

Yusgiantoro said a 14 percent stake, which was due to be sold in two tranches in 2008 and 2009, would cost $493.6 million.

Finance Minister Sri Mulyani Indrawati declined to comment on whether the government would buy the stake.

With regards to Newmont, I have no comment because we haven't reported to the president yet, she said.

Under the terms of the contract, foreign investors in PT NNT must sell 51 percent of the shares in the unit to local investors.

PT Pukuafu Indah, an Indonesian mining group, previously bought 20 percent of the unit, while Newmont and Japan's Sumitomo Corp own 45 percent and 35 percent respectively.

(Additional reporting by Adriana Nina Kusuma) (Writing by Aloysius Bhui; Editing by Sara Webb and Muralikumar Anantharaman)