East Kaltim demands 30 percent of KPC stake

The East Kalimantan House of Representatives demanded coal mining giant Kaltim Prima Coal (KPC) to divest 51 percent of its stake this year, and insisted that the local administration should have a 30 percent stake.

But KPC said that it would only divest 37 percent this year.

Pieter Pider of British Petroleum, who came from London to negotiate, and Philips Strachan of Rio Tinto, said that East Kalimantan must honor the existing contract.

The two were talking with the local parliament over the obligation of KPC to divest its shares this year, the local Suara Kaltim daily reported.

Local legislator H. Rusli said that the local administration must have the 30 percent stake because KPC had long exploited the resources of East Kalimantan and so far it's the central government, which had benefited from the 15.3 percent royalty.

Rusli said that if KPC failed to pay attention to this aspiration there would be a people power just like in the case of gold mining giant PT Kelian Equatorial Mining whose road had been blockaded by the local villagers.

The local parliament plans to summon the local administration to make a final stance over the KPC divestment plans. (*)