East Kalimantan councilors want KPC out of the province

Several members of the East Kalimantan legislative council have proposed for an immediate plenary session with the main agenda of asking the central government in Jakarta to terminate the mining contract of coal mining giant PT Kaltim Prima Coal (KPC), the local Kaltim Post daily reported.

Head of the council?s special team on KPC divestment program Agus Tantomo Mbus said that the government must stop the production of KPC because the company had never shown any goodwill to resolve the problem over its divestment obligation.

?KPC has no good intention. Since the meeting in Jakarta until now, there?s been no agreement over the price of the share,? he said.

KPC was represented by several of its top officials in the meeting including director Peter Vider and Lex Graefe from Rio Tinto. KPC is equally owned by Rio Tinto and BP.

KPC is obliged to divest 51 percent shares to the East Kalimantan administration. The divestment program was supposed to have already been completed, but dispute over the price has delayed the program.

KPC demands a price of US$448.8 million for the 51 percent stake, while East Kalimantan want to pay only $319 million.

Vider said that KPC had proposed to the administration to jointly appoint an independent appraisal to value the company shares, but this was rejected.

He said that the company has not intention to delay the divestment obligation.(*)