East Kalimantan insists KPC have to divest 51 percent shares
Tuesday, June 27 2000 - 04:00 AM WIB
East Kalimantan's governor Suwarna said the provincial administration stuck to its demand that coal mining company PT Kaltim Prima Coal to divest 51 percent of its shares by the end of the year.
Suwarna made the statement following reports that the provincial administration and the company had agreed on the number of shares to be divested by the company.
Earlier, director general of mining Surna Tjahja Djajadiningrat said both parties had agreed that KPC had to divest 44 percent shares this year.
Suwarna confirmed the agreement but he said the 44 percent stake is the number of shares to be divested by KPC by the middle of the year.
"The amount of shares to be divested by early July is 44 percent. But, during the divestment, KPC will have to announce its readiness to divest another seven percent that the total shares to be divested by December, 2000 is 51 percent," Suwarna was quoted as saying by Kaltim Post on Monday.
The governor said the province earlier demanded the coal company divest a 51 percent stake in the middle of this year, citing that the company started operation in the middle of 1990 and the company's contract of work stipulated that the company had to sell 51 percent of its shares to Indonesian government, companies, citizens in the tenth year of operation.
KPC however said the company was only obliged to divest 37 percent of its shares in the middle of this year, citing the addendum of its contract stipulating that it started operation in 1992.
KPC, equally owned by Anglo-Australian firm Rio Tinto and Anglo-American energy company BP Amoco, operates a huge coalmine in Sangatta. (*)