Govt, KPC to agree on share price in late February

The government said on Friday the price of the 51 percent stake in coal miner PT Kaltim Prima Coal (KPC) to be sold to it will be decided in late February.

The secretary general of the Ministry of Energy and Mineral Resources, Djoko Darmono, said negotiations between his office and KPC had shown positive signs.

?Yesterday I met with them, and negotiations are estimated to be finished by the end February. But the pessimistic scenario is that the new price will be decided only in early March,? Djoko told reporters at his office.

KPC is equally owned by Anglo-Australian mining giant Rio Tinto and Anglo-American energy giant BP PLC. Presently, it operates coal mines in Sangatta, East Kutai in East Kalimantan which turns out 15 million tons of coal annually.

Under the contract with the government, KPC has to sell up to 51 percent of its stake to the Indonesian government, state firms or Indonesian-owned companies after 10 years.

KPC's shareholders value the 51 percent stake at US$453 million, while the province is only ready to buy the stake at $320 million.

The East Kalimantan government has expressed its strong intention to by the shares. But negotiations between KPC and the East Kalimantan administration had stalled due to differences over the value of the shares.

The provincial government had reported the case to the South Jakarta District Court. (Leo)