Bumi Resources offers 20 percent stake in KPC to East Kalimantan

PT Bumi Resources Tbk has offered a 20 percent stake in PT Kaltim Prima Coal (KPC) to the East Kalimantan provincial administration as part of its divestment program, Bisnis Indonesia and Investor Indonesia newspapers reported on Tuesday.

PT Bumi Resources is the new owner of KPC. Previously, the East Kalimantan-based coal firm was owned by Anglo-Australian mining giant Rio Tinto and Anglo-American energy giant BP PLC.

“At present, we are still holding negotiations with East Kalimantan's administration. Let's see if they (the provincial administration), will take the offer or not," Martinus Peter, Bumi Resources' head of investor relations, he said.

Under the original contract, KPC has to sell 51 percent of its shares to local investors after ten years of production and the government has decided to offer 20 percent shares to state owned coal firm PT Bukit Asam and the remaining 31 percent to East Kalimantan and East Kutai. KPC's mining site is based in Sangatta, East Kutai.

Recently, East Kutai announced that it had bought a 18.6 percent stake in KPC from Bumi Resources. The purchase had sparked protests from East Kalimantan and Bukit Asam, which insisted that they had agreed to purchase the majority stake in KPC through a consortium.

Martinus also said KPC will increase its production from the present level of 18 million tons per year to 25 million tons in 2005. (*)