Ex-governor urges East Kalimantan to use autonomy power to deal with KPC
Thursday, January 11 2001 - 04:30 AM WIB
The former East Kalimantan governor HM Ardans called on the provincial administration to use its newly-obtained autonomy power to force coal mining giant Kaltim Prima Coal (KPC) to immediately transfer part of its shares to the local government.
Ardans was quoted as saying by the local Samarinda Post that the administration and the local parliament should act firmly if KPC continued to be uncooperative in settling the issue.
"The administration and the parliament must act firmly. Please use the new autonomy power," Ardans said.
The government launched the new autonomy law early this month, giving autonomy power to provinces and regencies in managing their economic and social affairs.
It is not clear, however, how East Kalimantan would force KPC to agree to the local government demand because KPC's mining contract was made with the central government, years ago. The new autonomy law does not annul the mining contract made with Jakarta.
KPC is jointly owned by the Rio Tinto mining group and British Petroleum.
The company was supposed to already divest 44 percent stake to the East Kalimantan government last year. But the divestment program was delayed because the local administration initially demanded for a 51 percent stake. Meanwhile, KPC insisted that it would only divest up to 37 percent stake in the first round of its divestment program. The company said that this was according to its mining contract with the government.
In the second round of divestment, KPC is expected to divest up to 51 percent stake. (*)