Govt okays KPC stake sale

Government said on Wednesday it had approved a plan by the country's biggest coal exporter PT Bumi Resources to sell a 32.4 percent stake in PT Kaltim Prima Coal (KPC).

The Energy and Mineral Resources Ministry on June 24 gave the official approval for the sale to PT Sitrade Nusaglobus, Simon Sembiring, the ministry's director general of geology and mineral resources told a parliamentary hearing in Jakarta.

The sale, at $470 million, needs final approval from the Investment Coordinating Board, he said to Petromindo.Com.

"The government approved the sale because Sitrade is fully owned by Indonesian businessmen, which is in line with Kaltim's coal contract that requires the miner to be sold to an Indonesian entity," Simon said.

The sale at $470 million values Kaltim at $1.45 billion, much higher than the $500 million Bumi paid to BP Plc and Rio Tinto in 2003 for the company.

After buying Kaltim, Bumi sold 18.6 percent of Kaltim to the government of East Kutai regency in East Kalimantan for $104 million.

Under the coal contract of work, KPC is required to sell 51 percent of the coal miner to Indonesian companies.(dino)