East Kalimantan insists for a 51 percent stake in KPC
Friday, April 27 2001 - 04:30 AM WIB
East Kalimantan Govenor Suwarna Abdul Fatah insisted that coal mining giant PT Kaltim Prima Coal (KPC) must divest up to 51 percent of its shares as stipulated under its mining contract with the government.
"It must be 51 percent. This is non negotiable," Suwarna said on Thurday as quoted by the local Kaltim Post daily.
He was speaking to the press following a meeting with the provincial parliament.
Suwarna said that the East Kalimantan administration would not hesitate to take legal action to win the 51 percent stake at KPC.
Meanwhile, a source said that the provincial administration had appointed 10 lawyers in case it had to go to court to deal with KPC.
KPC is supposed to divest part of its shares to local investors, in this case the priority is the East Kalimantan administration, since last year as part of its contract with the government. But the debate over how much shares the company had to divest had caused a delay in the divestment program. The East Kalimantan administration demanded KPC to divest up to 51 percent stake, while KPC only wanted to divest up to 44 percent.
Minister of Mineral Resources and Energy Purnomo Yusgiantoro has recently sent a letter to KPC, which is equally owned by Rio Tinto and Beyond Petroleum, to divest up to 51 percent stake this year.
Sources said that Rio Tinto and BP did not want to transfer the controlling shares in KPC to the East Kalimantan administration, which plans to invite a private investor from Jakarta to finance the KPC share acquisition.(*)