Govt, KPC to meet Wednesday on shares sale

The government and senior executives of East Kalimantan-based coal mining giant PT Kaltim Prima Coal (KPC) are scheduled to meet on Wednesday to discuss the sale of KPC shares, which had not materialized by January 31, 2003 as previously agreed upon by the two parties, an official of KPC shareholder Rio Tinto said Monday.

Rio Tinto?s spokesman Anang Noor said that with the shares sale failing to take place on January 31, KPC had rights to sell its shares to other Indonesian parties.

?As the deadline is over, KPC views that it can now sell its shares to other Indonesian investors,? Anang told Petromindo.Com.

Geology and mineral resources director general Wimpy S. Tjetjep confirmed Wednesday?s planned meeting between government officials and KPC?s executives.

Last July, Rio Tinto and BP Plc, another shareholder of KPC, formally offered 51 percent of its shares to Indonesian investors through the Indonesian government. The government then allocated 31 percent of the shares to East Kalimantan and later offered the remaining 21 percent shares to state coal miner PT Batubara Bukit Asam (PTBA).

East Kalimantan provincial administration decided to sell 31 percent of KPC shares to its company PT Melati and PT Pertambangan dan Energi which is owned by East Kutai regency administration. KPC operates a huge coal mine in East Kutai?s Sangatta district.

Also last July, the government and KPC shareholders agreed that due diligence audits on KPC shares buyers and KPC itself must be completed by the end of January of 2003.

PTBA said that the price of US$421 million for 51 percent of KPC shares was too high, asking for a price cut.

?After we (with PriceWaterhouseCoopers) conducted a ?high level review? on KPC, we concluded that the price is too high,? said PTBA?s corporate secretary Milawarma in a statement on Monday.

PTBA said that it wanted all necessary data about KPC, and some more time, so that it could conduct a due diligence audit on the company according to required standards.

Meanwhile, East Kalimantan officials later consistently opposed any due diligence audit by KPC on PT Melati and PT Pertambangan dan Energi arguing that they had been appointed buyers of KPC shares in a cabinet meeting. Meanwhile, KPC had also opposed any due diligence by the East Kalimantan firms.

So far, the government and KPC have not made it clear whether the divestment accord they had signed remains effective after the January 31, 2003, deadline is over. (godang/robert)