East Kalimantan councilors rumored to be brokers in KPC divestment

Two members of the East Kalimantan provincial council are seeking to become mediators between the East Kalimantan provincial administration and the potential investors who will provide financing for the province to buy shares in coal company PT Kaltim Prima Coal (KPC), according to rumors.

According to the rumor, local daily Kaltim Post said, the two councilors Agus Tantomo, a commission head at the council, and Andi Harun had opened two banks accounts where the investors would transfer the fund for the purchase of KPC's shares.

Both councilors would receive an unspecified amount of fee for the mediation service, the paper quoted the rumor as saying.

However Agus dismissed the rumor as "baseless" and "irresponsible", the paper said.

Under its mining contract, KPC, which is equally owned by mining giant Rio Tinto and energy firm Beyond Petroleum, has to sell up to 51 percent of its shares to the government, state companies or Indonesian companies after some period of production.

The East Kalimantan provincial administration has expressed interest in buying the shares but thus far it remains unclear how the province would raise financing for the purchase of the shares. (*)