East Kalimantan to meet central government Saturday over KPC divestment

The East Kalimantan administration and provincial legislative council will meet Saturday with top officials of the ministry of energy and mineral resources in Bogor, some 60 Km from Jakarta, to seek resolution over problems plaguing the divestment program of coal mining company PT Kaltim Prima Coal (KPC).

The local Kaltim Post daily reported Thursday that the ministry would be represented by its director general at the weekend meeting.

KPC is obliged to divest up to 51 percent of its stake to the East Kalimantan administration. But so far the two sides had been unable to agree on the share price.

The Saturday meeting is expected to seek resolution to the pricing problem.

KPC, which is owned by Rio Tinto and BP, operates a vast mining site in the East Kutai regency in East Kalimantan.

Meanwhile, local reports said that the East Kutai regency administration has expressed interest to purchase the KPC shares. It is not clear where the administration would get the cash to finance the purchase.

The provincial administration has obtained support from a Jakarta-based investor called PT Intan.

East Kalimantan provincial legislator Agus Tamtomo suspected the planned move by the East Kutai administration was part of a maneuver by KPC to maintain control over the vast mining sites.(*)