Govt mulls forming consortium to buy KPC shares

The government is considering to form a consortium of state enterprises which intend to buy a 51 percent stake in East Kalimantan based coal mining giant PT Kaltim Prima Coal (KPC), Koran Tempo daily quoted a well-placed government official as saying on Thursday.

Roes Aryawidjaya, deputy to the state minister of state enterprises, said the price of KPC shares is too high for individual state firms. Accordingly, forming a consortium would enable them to buy the shares, Roes told reporters.

KPC is set to divest 51 percent of its shares by end-June as agreed between its shareholders Rio Tinto and BP and the government. It is a mandatory divestment according to KPC?s contract of work.

The two sides agreed in March on an US$822 million valuation of the entire KPC operation.

Roes said on Thursday the state enterprises wishing to buy KPC shares included mining firms PT Aneka Tambang Tbk and PT Pertambangan Batubara Bukit Asam, and electricity firm PT PLN.

He said existing regulations allow the government to buy KPC shares through state enterprises.

Meanwhile, the East Kalimantan provincial administration insists that it become the preferred bidder for the 51 percent stake in KPC.

In another development, several private firms have also expressed their intention to buy KPC shares including PT Nusantara Energy and PT Bumi Resources; and East Kalimantan based firms PT Perusda Melati Bhakti Satya and PT Batubara Borneo Batuah.

KPC operates coal mines in Sangatta in East Kutai Regency, East Kalimantan. (*)