Deadline set for KPC divestment talks

The government is determined to conclude negotiations with coal mining company PT Kaltim Prima Coal on the amount of shares to be divested by the coal company this month.

Director general of mining at the ministry of energy and mineral resources Surna T. Djajadiningrat told Petromindo.Com on Thursday on the sidelines of a seminar on low-grade coal that the negotiation between the ministry and the coal company was still in progress with both of them still disagreeing on the divestment percentage.

He said KPC said that it was obliged to divest 37 percent shares this year, but the ministry insisted the company had to divest 44 percent of its shares.

Under the contract, the coal company had to gradually sell up to 51 percent of its shares to either the Indonesian government, state companies, private companies or citizens.

Surna said he had given a deadline for the negotiation until the end of this month. KPC and the ministry will appoint an independent lawyer as a "referee" to solve the matter, if the negotiation brings no results by next week.

Surna, however, did not disclose the name of the lawyer.

The provincial administration of East Kalimantan had expressed interest in buying KPC shares and, Surna earlier said, the provincial administration and the coal company had agreed on the price of US$175 million for 30 percent shares of KPC.

KPC is one of Indonesia's biggest coal mining company equally owned by oil Giant BP and Rio Tinto. (Alex)