Govt, KPC to sign divestment deal this afternoon: Official

The government and the shareholders of the East Kalimantan-based coal mining giant PT Kaltim Prima Coal (KPC) are scheduled to sign an agreement over the latter?s divestment program this after, according to an official.

Spokesman of the ministry of mineral resources and energy TA Nurwinarkun told Petromindo.com that the signing of the agreement would stop the lawsuit filed by East Kalimantan administration in October last year due to delays in the divestment program.

KPC, which is equally owned by Rio Tinto Plc and BP Plc, is obliged to divest up to 51 percent stake to local investor. But the divestment program had been delays due to various reasons. The latest was disagreement on the price of the stake.

Last week, KPC shareholders reached an agreement with the government of Indonesia on the price of the shares. A government source said that the two sides agreed that the value of 100 percent KPC shares is worth US$822 million.

The East Kalimantan government has been reportedly to have the first priority to purchase the KPC stake. It has been seeking private investors to help finance the acquisition.

KPC produced 15.6 million metric tons of coal last year, 16 percent more than the year before. The company sells the coal to power stations in Japan, Taiwan and elsewhere.(Godang)