BHP sees no buyer for Arutmin

Australian giant BHP said Wednesday it would comply with Indonesian regulations that require foreign companies to divest their coal stakes, but had never found a local buyer willing to pay fair value for the assets.

Under the existing law, foreign coal contractors are required sell down their equity stakes over time if there is a local buyer for the assets willing to pay the net present value of the stake, as assessed by the foreign company and agreed by the Indonesian government.

BHP operates and owns 80 percent of PT Arutmin Indonesia, the country's fourth largest coal mining located in East Kalimantan with production of 8 million tons in 2000

BHP also has 80 percent stake in PT BHP Kendilo Coal Indonesia, which is also located in East Kalimantan.

The issue of foreign companies selling down their stakes arose last week when PT Kaltim Prima Coal said its owners - Rio Tinto and BP - had agreed to sell 51percent of their holding to Indonesian partners.

BHP chief strategic officer Brad Mills said BHP had been through the exercise of valuing its assets annually over the past few years but had yet to find a buyer willing or able to pay the right price.

BHP said last year it was not comfortable about increasing investments in Indonesia due to the political strife there. (*)