Govt to negotiate with KPC on divestment percentage this week
Wednesday, November 1 2000 - 04:00 AM WIB
The government would negotiate with coal producer PT Kaltim Prima Coal on the amount of shares that the latter had to divest this year, director general of general mining at the ministry of energy and mineral resources Surna T. Djajadiningrat said on Tuesday.
"Our lawyer and KPC's lawyer will sit down together to decide on the matter this week," Surna said during a meeting between Minister of Energy and Mineral Resources Purnomo Yusgiantoro and the House of Representatives' Commission VIII, which oversees among others mines and energy affairs.
Surna said KPC insisted that under its contract of work (COW), it was obliged to divest only 37 percent of its shares this year, but the government insisted that it had to divest 44 percent.
If both parties failed to reach an agreement during the negotiation, both parties would bring the dispute to arbitration, Surna said.
Under the COW, KPC has to gradually divest up to 51 percent of its shares to either the Indonesian government, people or companies after ten years of production.
Surna said that East Kalimantan administration has shown great interest in acquiring KPC's stake. However, he said, it was not clear how much was the price offered by the provincial administration for the shares and how it would finance the acquisition.
The provincial administration has insisted that under the COW, KPC must sell 51 percent of its shares by the first quarter of next year.
KPC is one of Indonesia's top coal producer equally owned by oil giant Beyond Petroleum and Rio Tinto. (alex)