East Kutai backs Bumi Resources? move to take over KPC

The local authority of the East Kutai regency, the home base of the country?s second largest coal producer PT Kaltim Prima Coal (KPC), said that they welcome PT Bumi Resources? move to take over the coal mining company despite the strong protest made by the East Kalimantan authority in Samarinda, Republika reported on Thursday.

The regent of the East Kutai regency, Mahyuddin ST, said on Wednesday that Bumi Resources had pledged to transfer five percent of KPC?s shares to the local authority as a grant shortly after the company announced that it had secured a deal to take over the entire stake of KPC from Rio Tinto and BP Plc.

?All the Kutai people strongly support the take over and warmly welcome the company?s plan to offer KPC?s five percent shares as grant,? he said, adding that all segments of the local people met on Tuesday to discuss the offer. ?All components of the societies agree to receive the offer,? he said.

East Kalimantan government and state owned coal producer PT Tambang Batubara Bukit Asam had been named by the central government to buy the 51 percent stake that would be divested by KPC under a mandatory divestment program. The East Kalimantan would buy the shares through two government-owned companies one of which from East Kutai regency in the deal.

KPC?s shareholders however sold their entire stake to Bumi Resources instead. This angered both Jakarta and East Kalimantan which described the acquisition by Bumi Resources as a shady and suspicious transaction. (*)