UPDATE 1-Newmont considers IPO for 10 pct of Indonesian unit

* Newmont unit IPO would get govt approval -govt official

* Newmont unit to sell up to 10 pct in IPO - firm's document

* Seeks up to $800 mln in loans from banks, investors (Updates with government comment, details)

By Janeman Latul and Fathiya Dahrul

JAKARTA, Aug 18 (Reuters) - PT Newmont Nusa Tenggara (NNT), the Indonesian unit of Newmont Mining Corp (NEM.N), on Thursday will seek shareholder approval to sell up to 10 percent of its shares in an initial public offering, company documents showed.

Newmont will be the third foreign miner to list its Indonesian unit locally, a move that the Indonesia stock exchange is keen to encourage in order to raise the market's profile and improve liquidity, particularly at a time when Indonesian stocks .JKSE are trading at close to a record high.

"We will hold an extraordinary shareholders meeting this week to decide on an IPO plan to broaden NNT's financing options," said Rubi Poernomo, a spokesman for Newmont Indonesia, on Wednesday.

Nickel miner PT International Nickel Indonesia (INCO.JK), a unit of Brazil's Vale Inco Ltd (VALE5.SA), and coal miner PT Indo Tambangraya Megah (ITMG.JK), a unit of Thailand's Banpu BANP.BK, are listed in Jakarta.

Foreign investors are pouring money into Southeast Asia's biggest economy, including stocks and bonds, because of its strong growth prospects on the back of domestic demand and exports of natural resources.

"I think this is good news for our stock market that is looking to increase its size, which is still very small even though the country is the region's biggest economy," said Edwin Sinaga, president director at PT Finan Corpindo Nusa, a local brokerage.

NNT said in a shareholder document that it plans to seek as much as $800 million from bank loans or from third parties to finance capital expenditure.

Newmont previously said that it needs $3 billion to develop the Elang copper reserve in Sumbawa, which has estimated sufficient reserves for production until 2060. [ID:nJAK272960]

A government official said on Wednesday that Newmont would get government approval to list its local unit, which produces copper and gold, on the Jakarta stock exchange.

"We will not say no if Newmont wants to go for an IPO, we may likely approve it as we encourage foreign mining firms to be listed in Indonesia," Bambang Gatot Ariyono, director for minerals and coal development at the energy ministry, told Reuters. (Reporting by Janeman Latul and Fathiya Dahrul; Editing by Neil Chatterjee)