Govt expects KPC divestment program to be concluded in March

The government hopes that PT Kaltim Prima Coal divestment program could be concluded in March next year, the director for coal enterprise at the ministry of energy and mineral resources Mahyuddin Lubis said Thursday.

“We hope that the sales and purchasing agreement on the KPC divestment program will be signed by March 2005,” Mahyuddin said on the sidelines of the annual gathering of the Association of Indonesian Mining Professionals (Perhapi) in Palembang.

The government and mining giant PT Bumi Resources, the owner of East Kalimantan-based coal miner KPC, have agreed to value the entire shares of KPC at US$1.452 billion.

According to Mahyuddin, the valuation of the KPC shares is made under an assumption that average coal prices in the period of 2008-2021 will be at US$35.50 per ton.

Under the divestment program, KPC should divest up to 51 percent shares to local investors. Bumi, had already sold 18.6 percent of the company's shares to East Kutai regency administration immediately after it took over the mining company last year. (Robert)