House seeks independent team to evaluate the value of KPC shares

The House of Representatives has said the price of East Kalimantan-based PT Kaltim Prima Coal (KPC) at US$1.98 billion was too high, and called for an independent body to evaluate the price of 100 percent of Indonesia’s largest coal miner, the Koran Tempo newspaper reported in its Friday edition.

The chairman of the House’s Commission that oversees energy and mineral resources Irwan Priyanto said the price suggested by KPC was too high, almost doubled from the initial price, which was agreed at the time of the start of the divestment process.

“The independent team will evaluate the value of the entire shares of KPC,” Irwan told reporters in Jakarta on Thursday.

Based on this new evaluation, the price of KPC shares would be fixed for the continuation of the divestment process. The House is committed to divest 51 percent shares of KPC in line with the coal contract signed by the KPC with the government, Irwan said.

The price of nearly $2 billion KPC shares was revealed by KPC president director Ari S. Hudaya in a letter sent to the director general for geology and mineral resources Simon F. Sembiring on June 30.

Bumi bought KPC for US$500 million in 2003 from former owners Rio Tinto and Bp Plc. (*)