E. Kalimantan regents advised not to meddle in KPC share divestment

East Kutai regent Mahyudin has called on other regents from East Kalimantan not to meddle in the divestment of coal producer PT Kaltim Prima Coal (KPC), local daily Kaltim Post reported Monday.

?They would be better take care of their own business,? the paper quoted Mahyudin as saying Sunday.

KPC operates a huge coalmine in East Kutai?s Sangatta district.

Mahyudin said that, under the current regional autonomy laws, East Kutai had authority over matters related to the divestment of KPC shares.

Meanwhile, several NGO leaders from East Kutai also lashed out at some people from the province who they said had often made public comments on KPC share divestment although they knew little about that matter.

Rio Tinto and BP Plc, which has equal stakes in KPC, are in the process of selling their entire shares in the coal firm to PT Bumi Resources, an Indonesian publicly listed firm controlled by tycoon Abdurizal Bakrie.

Bumi has reportedly offered to donate five percent of KPC shares to East Kutai.

Meanwhile, Bumi and KPC shareholders said they would make sure that KPC would fulfill its contractual obligation after Bumi acquire the coal mining firm. Under the contract signed in 1980s, KPC's shareholders are obliged to sell up to 51 percent of their shares in the firm to either the Indonesian government, state owned firm, Indonesian-controlled private firms or Indonesian citizens.

Last year, after protracted negotiations, the government decided to allocate 30 percent of the 51 percent shares to East Kalimantan provincial administration and the remaining 21 percent state coal producer PT Tambang Batubara Bukit Asam.

The government and KPC shareholders agreed on a US$822 million valuation of entire KPC shares, compared with the $500 million agreed on by KPC shareholders and Bumi. (*)