East Kutai council opposes plan to shut down KPC

Speaker of the East Kutai legislative council in East Kalimantan Abdal Nanang opposed plan by provincial councilors to demand the central government to terminate the mining contract of coal mining giant PT Kaltim Prima Coal (KPC), which would effectively shut down the operation.

The local Radar Kaltim daily quoted Abdal as saying that the shut down of the KPC operation would only create difficulties to the life of the people living in the East Kutai regency.

Abdal also called on the provincial administration and councilors not to act like small children in relation to the KPC divestment program.

?We fully support the plan by the administration to have a 51 percent stake in KPC. But we want the government to negotiate professionally so that there would have to be no shut down because the impact would be fully felt by the East Kutai people,? he said.

The East Kalimantan legislative council special team on KPC divestment earlier called on the council to hold a preliminary session to ask Jakarta to terminate the working contract of KPC because the latter had continued to delay the divestment obligation.

KPC is required to sell up to 51 percent stake immediately this year to the East Kalimantan administration. But the two sides continue to argue over the share price. KPC wants US$448.8 million for the 51 percent stake, while East Kalimantan insist on $319 million.

KPC proposal to appoint an independent appraisal to decide the value of the share had been turned down by the East Kalimantan administration. (*)