East Kalimantan to ask minister to press KPC to immediately complete divestment program
Thursday, July 12 2001 - 01:59 AM WIB
The local Radar Kaltim daily reported Thursday that the special team would insist on the minister to fix the divestment price or to ask the minister to withdraw the mining contract of work held by KPC if the latter refused to agree to the price.
The paper said that the special team would meet with Purnomo on Monday after the latter came back from China.
?If the price for the divestment of 51 percent shares can not be agreed, then we?ll offer two options to the minister. First, we?ll ask the minister to use his authority to fix the price, and second will insist on the minister to withdraw the contract of work held by KPC,? secretary of the special team Andi Harun told Radar Kaltim.
The special team met on Wednesday with several senior officials of the ministry of energy and mineral resources to seek resolution to the snag in the divestment program.
KPC, one of the world?s largest coal mining company, is jointly owned by Rio Tinto and BP. The company has vast coal mining area in the East Kalimantan province.
KPC is obliged to immediately divest a 51 percent stake to the East Kalimantan administration. But the divestment program has been delayed for several times due to various reasons. The company initially wanted to only divest 44 percent shares, but was rejected by the central government.
The latest problem centers in the price of the divestment.
Andi said that based on the initial calculation agreed by KPC, the directorate general of geology and mineral resources set a price of US$297 million for the 51 percent stake, compared to the $319 million price willingly to be paid by the East Kalimantan administration.
But KPC later insisted that the 51 percent stake cost around $443 million.
Andi said that if KPC continued to insist on its new price demand, minister Purnomo should take steps to allow the divestment program to be implemented immediately.
?We want to have certainty over this divestment program on Monday. Because this affair has drained a lot of energy and cost a lot of money,? he said.
The East Kalimantan earlier had reported KPC to the National Police and the Attorney General?s Office over alleged corruption. The report was made as the divestment program drags on, which seems to frustrate the local administration.(*)