Govt optimistic to complete KPC divestment deal soon

The government is optimistic to soon complete a deal with the East Kalimantan-based coal mining giant PT Kaltim Prima Coal (KPC) over the latter?s divestment obligation although KPC officials failed to show up at a scheduled deal-making meeting Monday afternoon.

?We?re optimistic we can complete the deal,? said secretary general of the ministry of mineral resources and energy Djoko Darmono.

KPC, which is equally owned by Rio Tinto and BP Plc, is obliged to divest a 51 percent stake to local investors this month.

It has been reported earlier that the central government and KPC were supposed to finalize talks over the divestment obligation after the two sides reached agreement last week over the crucial pricing issue. It has been agreed that 100 percent shares of KPC is valued at US$822 million.

But KPC officials did not show up at the meeting. A source said that KPC was not comfortable with the demand of the central government to make the East Kalimantan administration as the preferred bidder for the KPC stake. The source said that this was the only remaining hurdle to the complete of the divestment talk.

Meanwhile, a spokesman of the ministry of mineral resources and energy TA Nurwinakun said that the East Kalimantan administration has agreed to drop its lawsuit filed at the Jakarta court against KPC. The lawsuit was made due to previous delays in the divestment program.(alex/godang)