East Kutai legislative council disagrees with proposal to suspend KPC operation
Saturday, July 28 2001 - 02:39 AM WIB
Abdal was quoted by the Kaltim Post daily as saying that the closure of KPC would only do harm to the East Kutai people and further tarnish the international image of Indonesia.
?We have not yet agreed on such a plan,? he said.
Secretary of the provincial legislative council special team on KPC Andi Harun earlier was quoted by the press as saying that the East Kutai council had agreed over the proposal to shut down KPC. He made the statement following a meeting with the East Kutai council.
The provincial council has planned to demand the central government to temporarily shut down KPC due to slow progress in the divestment of the KPC shares.
KPC, which is equally owned by Rio Tinto and BP, is obliged to divest up to 51 percent shares to the East Kalimantan administration. KPC controls a vast mining site in the East Kutai area.
But it seems that the East Kalimantan administration may not be able to complete the transaction this year due to price disagreement. KPC shareholders want East Kalimantan to pay US$448 million for the 51 percent stake, but East Kalimantan insisted a price of around $319 million. The local administration has accused KPC of trying to delay its divestment obligation.
East Kalimantan has rejected the proposal from KPC to appoint an independent appraisal.
Meanwhile, head of the East Kalimantan provincial council special team Agus Tamtomo said that there was some progress made during a meeting with Rio Tinto and Minister of Mineral Resources and Energy Purnomo Yusgiantoro Friday in Jakarta.
Agus said that KPC was expected to soon propose a new price based on input given by the minister.
He said that the minister?s price proposal was closed to the level asked by the East Kalimantan province.
Agus said that another meeting would be held next week.(*)