Govt decides groups of KPC share buyers

The government on Thursday decided groups of investors which will be allowed to purchase the 51 percent stake in East Kalimantan-based coal mining giant PT Kaltim Prima Coal (KPC), East Kalimantan-based Kaltim Post reported on Friday.

The groups were the East Kalimantan provincial administration, state companies and private investors, Kaltim Post quoted as saying the spokesman of the Ministry of Energy and Mineral Resources, TA Nurwinakun.

Decision on the investor categories was made in a special meeting of cabinet ministers which was chaired by Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti. Also attending the meeting were National Police Chief Gen Da?i Bachtiar and Attorney General M.A. Rachman.

?The meeting did not decide the percentage of KPC shares to be offered to each of the categories,? Nurwinakun said.

Nurwinakun added the government would involve the East Kalimantan administration in deciding the portion of shares for each of the groups.

The ministers will meet again next Thursday to further discuss preparations for KPC share divestment, Nurwinakun said.

KPC is scheduled to divest 51 percent of its shares by end-June based on the agreement between its shareholders Rio Tinto and BP Plc, and the Indonesian government. It was a mandatory divestment as stipulated by KPC?s contract.

The government and KPC?s shareholders agreed in March on a US$822 million valuation of the company entire operation.

Meanwhile, East Kalimantan provincial leaders said on Thursday they rejected the government?s decision of selling KPC shares to the three groups of buyers.

?The central government has breached its promise. It should not happen,? said provincial legislative council vice chairman Kasyful Anwar.

Saying that the central government had initially supported his province to become the preferred bidder for KPC shares, Kasyful said the East Kalimantan people should close ranks against Jakarta.

East Kutai Regent Awang Faroek agreed saying that the central government had breached its commitment.

?No, it can not happen like that. The Central government should be consistent with its initial commitment,? Awang told Kaltim Post.

KPC, equally owned by Rio Tinto and BP Plc, operates coalmines in Sangatta District in East Kutai, East Kalimantan. (*)