East Kalimantan people must get priority in buying KPC shares

The East Kalimantan people must get the first priority in purchasing the shares of the world's second largest coal mining company PT Kaltim Prima Coal (KPC) before the provincial administration offer it to outside investors, according to experts.

Dean of the faculty of economy at the University of Mahakam Sukiman Affandi, and director of management school at the University of Mulawarman Mardiyono were quoted by the Kaltim Post daily as saying that KPC was regarded as the provincial asset and the ownership of the company shares by local people and businessmen should be good for the company.

KPC is required to divest up to 50 percent of its shares this year, in which 37 percent would be divested in the first stage. The East Kalimantan administration will get the top priority to purchase the shares.

The comments of the two local university experts were made in response to the plans by the East Kalimantan administration to invite PT Intan from Jakarta to finance the acquisition of KPC. Under the plan, PT Intan would provide the East Kalimantan administration with a 10 percent stake for free.

But many are questioning the background of PT Intan, why the local government had not first ask the participation of the local people and businessmen to help finance the acquisition.

According to reports, the 37 percent stake is valued at US$175 million. (*)