East Kalimantan councilors to meet minister over KPC divestment July 12

The special team of the East Kalimantan provincial Council will meet with Minister of Mineral Resources and Energy Purnomo Yusgiantoro in Jakarta on July 12 to question the slow progress in the divestment obligation of the giant coal mining company PT Kaltim Prima Coal (KPC).

The local Kaltim Post daily quoted councilor Andi Harun as saying that the minister should have pressed hard the KPC management to immediately divest 51 percent shares to the East Kalimantan administration.

He said that there was a suspicion that the ministry was somehow collaborating with the company to delay the divestment.

He said that if the divestment was delayed until next year, the East Kalimantan administration would suffer losses as the company was expected to distribute hefty dividend by the end of this year. He said that the company?s profit this year was projected to reach US$100 million.

KPC is obliged to divest up to 51 percent shares to the local government. But KPS insisted a price of between $440-450 million for the 51 percent stake, much lower than the local government estimate price of $119.9 million.(*)