E. Kalimantan to soon conduct due diligence on KPC

The East Kalimantan provincial administration has planned to conduct due diligence on coal mining firm PT Kaltim Prima Coal (KPC) early this month before negotiating with company shareholders about share price, provincial secretary Syaiful Teteng said on Friday as reported by local daily Kaltim Post.

?We shall conduct due diligence on KPC assets in the first week of November,? Syaiful said.

Syaiful said however the provincial administration had not yet submitted its formal bid to purchase the 30-percent stake in KPC.

He added they would involve independent consultants in the share deal.

The central government and KPC shareholders, world energy and mining giants BP Plc and Rio Tinto, agreed early this year on US$822 valuation of the entire operation of KPC.

Syaiful said the US$822 valuation was too high for them.

On Thursday, the central government formally named two companies from East Kalimantan to purchase 31 percent of KPC shares. They were PT Melati Bhakti Satya and PT Pertambangan dan Energi Kutai Timur which are respectively owned by the East Kalimantan provincial administration and the East Kutai regency administration.

The central government on the same day also named state coal miner PT Batubara Bukit Asam to purchase a 20 percent stake in KPC.

Late in July, KPC formally offered 51 percent of its shares to Indonesian investors through the central government in line with its contractual obligation.

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