East Kalimantan insists to have a 51 percent stake in KPC

East Kalimantan must have a 51 percent stake in coal giant mining company PT Kaltim Prima Coal (KPC) to obtain a management control, according to Speaker of the local House of Representatives Sukardi Djarwo Putronya.

Sukardi said that the House had no objection that KPC would only divest 44 percent of its stake this year, but East Kalimantan must get the remaining 7 percent.

"It's not a problem if only 44 percent (is divested) this year, ? but we must obtain the remaining 7 percent," he was quoted by the local Kaltim Post daily as saying.

"With a dominant share ownership, we can have full supervision (of the management) ? so that KPC can be truly a benefit to the region," he added.

The government has recently decided that KPC must divest 44 percent of its shares this year following strong demand from the East Kalimantan administration that the company must divest up to 51 percent stake this year.

KPC initially said that it would only divest 37 percent stake this year, according to the contract with the government, and another 7 percent in each of the following years to reach a total divestment of 51 percent.

The contract stipulates that KPC is oblige to divest its shares to Indonesian individual or company. The East Kalimantan administration, through its local entity, gets the first priority.

The administration has said that it planned to team up with a Jakarta-based PT Intan which would provide financing of the acquisition.

But Sukardi said that the House has yet to give its approval on the plans to team up with PT Intan. (*)