Government, KPC to meet on share prices

The government planned a meeting with the shareholder of coal mining giant PT Kaltim Prima Coal (KPC) to talk about the price for the 51 percent shares the company planned to divest this year.

Director general of geology and mineral resources at the ministry of energy and mineral resources Wimpy S. Tjetjep told Petromindo.com last week that the meeting was scheduled for June 21.

After tough and lengthy negotiations, KPC shareholders --- Anglo Australian mining giant Rio Tinto and Anglo American energy giant BP ? recently finally agreed to divest 51 percent of its stake this year.

Under the contract, KPC, which operates a huge coal mine in Sangatta, East Kalimantan, is obliged to gradually divest its shares that after ten years of production the company must have sold a total of 51 percent of its shares to the Indonesian government, state companies, private companies or citizens.

But the company and the government, especially the East Kalimantan provincial government which is interested in the shares, were for years involved in the dispute about when the company started production. This made both parties had different figures about the number of shares the company had to sell each year.

Although KPC?s shareholders have agreed to sell 51 percent shares this year, disagreement remains about the price of the shares.

The government valued the 51 percent shares at US$297 million, while KPC values all it shares at $880 million, according to Wimpy.

Meanwhile, East Kalimantan dailies reported that the provincial administration valued the 51 percent shares at $350 million. (Alex/Godang)