East Kalimantan says KPC shares not for foreigners

The East Kalimantan administration said that the shares to be divested by the coal giant PT Kaltim Prima Coal (KPC) could not be directly or indirectly purchased by foreign investors.

The Bisnis Indonesia daily quoted provincial legal affairs chief P.D.D. Dermawan as saying that the involvement of a foreign investor in the acquisition of the KPC shares would be against the mining contract.

Dermawan made the statement following earlier report in the paper quoting unnamed source as saying that international financier George Soros would back up PT Intan Inti Bumi Perdana to help finance the plan by the East Kalimantan government to acquire the KPC shares.

KPC, which is equally owned by BP and Rio Tinto, is obliged to divest a 51 percent stake to the East Kalimantan administration. The two sides have not yet completed, however, the negotiation for the price of the shares.

Earlier, Director general for geology and mineral resources at the Ministry of Energy and Mineral Resources Wimpy S, Tjetjep also said the take over of KPC shares by foreigners would be against the divestment procedure as stated in the contract.

He said that George Soros? plan to take over KPC shares would be rejected although the takeover would be made through local company.(*)