Govt gives deadline to PTBA and E. Kalimantan on KPC?s divestment

The government will give time to East Kalimantan provincial administration and state-owned coal producer PT Tambang Batubara Bukit Asam (PTBA) until the end of 2003 to acquire a stake in East Kalimantan-based coal company PT Kaltim Prima Coal (KPC), several newspapers including Investor Indonesia reported on Wednesday.

If they fail to make a decision by the end of this year, the government will offer the KPC shares again but with new terms in 2004.

?We will ask for certainty from East Kalimantan administration and PTBA to complete the divestment of KPC by end of December,? Minister of Energy and Mineral Resources Purnomo Yusgiantoro said during a meeting with House of Representatives? Commission VIII in Jakarta on Tuesday.

According to Purnomo, KPC has succeeded in selling only 18.6 percent of shares to East Kutai regency out of planned 51 percent divestment. The sale of remaining 32.4 percent of shares is not yet realized.

If the KPC?s divestment process is not completed this year, the issue will be submitted to the President and Cabinet for further decision, the minister said.

Under the original contract, KPC has to sell 51 percent of its shares to local investors after ten years of production and the government has decided to offer 30 percent shares to PTBA, the remaining 31 percent to East Kalimantan and East Kutai.

East Kutai has announced that it had bought 18.6 percent shares. PTBA and East Kalimantan refused to buy the remaining shares, insisting that they would only buy the 51 percent stake together with East Kutai through a consortium.(*)