Divestment obligation of Arutmin rises to 31 percent

The number of shares that coal mining company PT Arutmin Indonesia had to divest this year has risen to 31 percent from 24 percent last year, Bisnis Indonesia reported.

Coal director at the Ministry of Mines and Energy Soedjoko Tirtosoedjoko said the increase in the company's divestment obligation followed its failure to sell 24 percent of its shares to the Indonesian companies , citizens or governmental agencies last year.

He said Arutmin offered the 24 percent shares at the price of US$40 million but no Indonesian companies were interested to make buy for several reasons, including the low quality of its coal.

The company operates a huge coal mine in South Kalimantan.

The company was initially owned by American oil and gas company Atlantic Richfield Company (ARCO) but it later sold 80 percent of its shares to Australian firm BHP Pty. Ltd and the remaining 20 percent to Indonesian business group Bakrie Group, the paper said.

Under the coal contract of work signed in Nov. 1981, Arutmin has to gradually divest up to 51 percent of its shares to Indonesian companies, citizens or governmental agencies starting from 1994. The remaining shares it has to divest totaled 31 percent as Bakrie has bought 20 percent of its shares.

But, the divestment was delayed until last year due some changes in regulations, the paper said.

Other coal companies that had to divest their shares are PT Kaltim Prima Coal (KPC), PT BHP Kendilo Coal, PT Kideco Jaya Agung.

KPC is offering 30 percent of its shares starting last year but thus far no companies had agreed to buy it.

Kideco, which was offering 23 percent of its shares, also thus far failed to find buyers. The government will raise its divestment obligation to 30 percent this year, Seodjoko said .

Kendilo also found to find buyers for its shares due to the low quality of its coal, Soedjoko said without specifying the number of shares it had to divest. (*)