Govt, KPC differ over divestment price

Coal mining giant PT Kaltim Prima Coal (KPC) in East Kalimantan has insisted that the selling price for its 51 percent stake was US$410 million, director general of geology and mineral resources Wimpy S. Tjetjep told Petromindo.com on Tuesday.

Wimpy said that the price set by KPC was much higher than the $297 million price estimated by the government.

"The main problem now lies in the pricing issue," he said.

The government has required KPC to divest up to 51 percent stake in the first semester of this year. The East Kalimantan administration gets the first priority to purchase the shares.

The divestment program has been delayed for more than a year due to dispute over the amount of shares that must be released by KPC.

The company had insisted that it was only supposed to divest up to 37 percent stake this year, while the East Kalimantan administration insisted a 51 percent stake. Finally, Minister of Mineral Resources and Energy Purnomo Yusgiantoro sent a letter to KPC recently demanding the company to divest up to 51 percent shares.

KPC is jointly owned by Rio Tinto and Beyond Petroleum.

The East Kalimantan administration has invited a Jakarta-based investor called PT Intan to fully finance the acquisition of the KPC shares.

But the much higher price demanded by KPC for the 51 percent shares may create a new problem to the realization of the divestment program.(Godang)