East Kutai makes payment for 18.6 percent of KPC

The East Kutai regency administration has paid US$104 million for 18.6 percent of East Kalimantan-based coal mining PT Kaltim Prima Coal, Koran Tempo reported on Thursday.

"I was informed about the payment by KPC's lawyers. But I don't know when the payment was made," legislator Irwan Prayitno was quoted by the paper as saying on Wednesday.

The regency initially promised to make the payment by April this year, but it later asked to cancel it until end of June given difficulties it faced to collect the funds, the paper said.

Under the contract, KPC is required to divest up to 51 percent of its stake to either the government or Indonesians after ten years of operation. With the sale of the 18.6 percent stake to East Kutai, PT Bumi Resources, as the owner of KPC, still needs to sell another 32.4 percent of its shares in the firm to meet its divestment obligation.

Bumi Resources earlier targeted to complete the divestment of the 51 percent stake in the second quarter of the year.

The giant coal miner, based in Sangatta, East Kalimantan, was initially equally owned by Anglo-Australian mining giant Rio Tinto Plc and Anglo-American energy firm BP PLC. They agreed last year to sell their entire stake in the firm to Bumi Resources. (*)