East Kalimantan, KPC fail to reach agreement over divestment issue

The East Kalimantan administration failed to reach agreement Thursday with coal mining company PT Kaltim Prima Coal (KPC) over the latter?s divestment program.

Speaker of the East Kalimantan provincial legislative council Sukardi Djarwo Putro told Petromindo.com that both the provincial administration and KPC could not reach agreement over the price issue.

Sukardi said that another meeting would be held on August 18.

Caretaker Minister of Energy and Mineral Resources Purnomo Yusgiantoro facilitated a meeting at his office between the East Kalimantan side and the shareholders of KPC. The main agenda of the meeting was to seek agreement over the price of the KPC shares.

KPC, which is equally owned by Rio Tinto and BP, is obliged to divest up to 51 percent shares to the East Kalimantan administration. But KPC wants East Kalimantan to pay US$448 million for the 51 percent stake, while the province insists on $319 million.

The divestment process of the KPC shares has been dragging for almost two years now.

Individual members of the East Kalimantan legislative council had earlier threatened to launch a campaign for the temporary closure of the KPC operation if the Thursday meeting came out with no concrete result.(Alex/Godang)