Indonesian investment holding company PT Rajawali is looking to divest a controlling stake in gold mining company PT Archi Indonesia, reported Bloomberg News, citing people familiar with the matter.

The Indonesian conglomerate, which is owned by tycoon Peter Sondakh, is working with an undisclosed financial adviser on the potential sale.

Rajawali expects the potential deal to value PT Archi Indonesia at $1bn (Rp15.71bn).

The people said that talks are ongoing. There is no certainty that PT Rajawali will proceed with the stake sale.

Said to be one of the pure-play gold producers in Indonesia and South East Asia, PT Archi Indonesia is majority-owned by PT Rajawali.

Archi owns a 100% stake in the Toka Tindung pure-play gold mine, which is located 35km north-east of Manado, Indonesia.

The stake is held through several of Archi’s wholly owned subsidiaries, namely PT Meares Soputan Mining(MSM) and PT Tambang Tondano Nusajaya (TTN).

MSM and TTN hold the works contract related to 40,000 hectares of mining concessions in North Sulawesi, Indonesia.

As of 2020, the Toka Tindung mine produced 1.9 million ounces of gold, supported by an annual processing plant capacity of 3.6 million tonnes a year.

Recently, Indonesian Government official Septian Hario told Reuters that the government will not approve new mining production quotas for the rest of this year.

Due to an ongoing investigation into illegal mining, the government had to revert to an earlier licensing process, which delayed the distribution of mining quotas.

In May this year, the government announced plans to launch a nickel price index by 2023 to restrict market volatility.