Gov't claims to reached deal on KPC divestment, Rio Tinto denies
Friday, April 6 2001 - 12:00 PM WIB
The ministry of energy and mineral resources said Friday it had reached agreement with the shareholders of coal mining company PT Kaltim Prima Coal on the company's divestment obligation, but one of the shareholders, Anglo Australian mining giant Rio Tinto denied the claim.
The ministry's secretary general Djoko Darmono told reporters that the ministry and KPC shareholders had agreed KPC has to divest 51 percent of its share this year.
KPC is equally owned by Anglo Australian miner Rio Tinto and Anglo American energy giant Beyond Petroleum (BP)
"We have agreed that KPC has to divest 51 percent of its shares in the first quarter of this year and priorities will be given to the East Kalimantan provincial administration to buy the shares," Djoko said.
But Lex Graefe, Rio Tinto Indonesia's general manager of finance who is in charge of the divestment negotiation denied Djoko's statement.
"Up to now, we have not reached any agreement regarding the divestment.
"What happen is the minister of energy and mineral resources recently sent us a letter urging us to divest 51 percent of KPC's shares this year. We are still seeking to clarify some issues before we respond to the letter," Graefe told Petromindo.com via telephone.
He declined to reveal what the issues were.
Aside from the issue regarding the amount of shares to be divested, KPC shareholders had yet to agree with the government on the price of the share, he said.
Under the contract, KPC, which operates a huge coal mining in Sangatta, East Kalimantan, is obliged to sell up to 51 percent of its shares to the Indonesian government, state companies or private companies controlled by Indonesians after ten years of production.
But, KPC as well as the East Kalimantan provincial administration, which is interested in buying the shares, has been for more than one year involved in dispute over the amount of shares to be divested by the company.
East Kalimantan demanded last year the company sell 51 percent of its shares, but the company said it was required to divest only 37 percent shares that year.
KPC is Indonesia's second largest coal producer with an output of 14 million tons in 2000. (alex/godang)