E. Kalimantan regent guarantees security on KPC?s coal mine
Monday, July 28 2003 - 02:47 AM WIB
The East Kalimantan-based KPC would be sold to Jakarta-listed PT Bumi Resources.
?The East Kutai regent guarantees security for the operation of KPC,? KPC?s spokesperson Nunik Maulana said.
KPC operates a huge coalmine in East Kutai, East Kalimantan.
Last Friday, East Kutai regent Awang Faroek met with KPC officials and local community leaders and told them that local authorities would not support any plan to disrupt the company?s coal mining and coal shipment activities, Nunik said.
KPC shareholders Rio Tinto and BP Plc, which equally owned the company, announced last week that they had decided to sell 100 percent shares of KPC to Bumi Resources for US$500 million. The transaction is expected to be completed in October.
The announcement came as a surprise as the central government and the East Kalimantan authorities were in final negotiation to allow the latter to acquire a 51 percent stake in KPC together with state-owned coal mining firm PT Tambang Batubara Bukit Asam. East Kalimantan has long demanded for a stake in KPC once BP and Rio Tinto implement their contractual obligation of divesting part of KPC shares to local investors.
The decision to sell the KPC stake to Bumi Resources has raised concern of backlash from the local authorities.
Meanwhile, the East Kalimantan chapter of National Youths Committee (KNPI Kaltim) said that they opposed any efforts to blockade KPC?s project sites.
?KNPI Kaltim agrees with the East Kutai administration and the East Kalimantan provincial administration that we need to negotiate KPC share divestment again,? KNPI Kaltim chairman Amir P. Ali told Balikpapan-based Kaltim Post daily.
Amir said that the regions could buy KPC shares from Bumi Resources in accordance with their financial capacity. (godang)