Kideco divestment price agreed

Government and East Kalimantan based coal mining giant PT Kideco Jaya Agung had finally reached agreement on the price of the shares that would be divested this year, according to a senior official from ministry of energy and mineral resources.

?Government and Kideco had agreed that the value of 100 percent of Kideco?s shares is US$ 415 million, and in 2001 Kideco must offer 37 percent of its shares based on that price,? Wimpy S. Tjetjep, director general of geology and mineral resources told Petromindo.com in Bandung Sunday.

Wimpy said the offer for 2001 divestment would be closed in March 31, 2002.

Under the coal contract of work, a foreign coal contractor must gradually divest up to 51 percent of its shares to Indonesian owned business entities or to the government of Indonesia after ten years of production.

In the fifth and sixth year after commercial production commence, coal contractors are obliged to offer 15 percent and 8 percent of their shares and then 7 percent annually until the tenth year.

Wimpy urged that the ailing state tin miner PT Timah to bid for at least 10 percent of Kideco?s shares.

?The price is good and it would help PT Timah to survive,? he said.

Kideco is one of Indonesia?s top coal producers, operating a coalmine in Pasir regency, East Kalimantan.The company, which is currently wholly owned by Sam Tan Co.Ltd of South Korea, plans to produce some 10 million tons of coal in 2001.

Kideco sells most of its coal to Korea, Taiwan, Slovenia, Japan and The Philippines. Domestically it sells coal to Indonesia Power. (alex)