E. Kalimantan gives no indication to withdraw suit against KPC

The East Kalimantan provincial administration gave no signals by last week to withdraw its legal suit against coal mining giant PT Kaltim Prima coal (KPC) which is set to divest 51 percent of its shares to Indonesian investors no later than late-June, East Kalimantan-based Kaltim Post daily reported on Monday.

?There is still no indication that East Kalimantan will withdraw its legal suit,? Kaltim Post quoted as saying the spokesman of the Ministry of Energy and Mineral Resources, TA Nur Winakun.

KPC set June 30 as deadline to divest 51 percent of its shares, which is an obligatory sale as stipulated in its contract.

KPC?s shareholders world energy giants Rio Tinto and BP Plc said earlier they would divest the 51 percent stake in KPC if their legal battle with East Kalimantan had been resolved.

KPC preident director Noke Kiroyan said they may ask for international arbitration over their dispute with East Kalimantan.

Nurwinakun said on Friday the special team of cabinet ministers dealing with KPC share divestment would soon meet to discuss the East Kalimantan?s stance.

East Kalimantan, claiming that it had preferential rights to purchase the 51 percent stake in KPC, last year sued KPC for US$776 million in the South Jakarta district court. The amount was to compensate divestment delay.

KPC is required under its contract to divest 51 percent of its shares to Indonesian partners after 10 years commercial operation. It started commercial operation in 1992.

Meanwhile, the central government made clear recently that the 51 percent stake in KPC would proportionally be sold to state enterprises, the East Kalimantan administration and private investors.

KPC operates huge coalmine in Sangatta in East Kutai Regency, East Kalimantan. (*)