KPC asks for extension of its divestment program

East Kalimantan-based coal mine operator PT Kaltim Prima Coal (KPC) has asked the government for a one-month extension of the company’s mandatory divestment program to give more time to the company’s management to set the price of the shares, Bisnis Indonesia reported Thursday.

Director of Mineral and Coal Exploration at the Directorate General of Geology at the Ministry of Energy and Mineral Resources, Mahyuddin Lubis, said in Jakarta on Wednesday that KPC had asked to extend the deadline for another one month to allow it to determine the price of the 32.4 percent of the company’s shares which would be divested to local investors.

He said that the price set up by KPC’s management would be submitted to the government for evaluation. “If the price set by the company differs from what has been calculated by the government’s team, there should be a revaluation to find the fair price of the shares,” he added. He said that the revaluation would be carried out by an independent appraiser appointed by the government.

As with the proposal for the extension of the deadline, Mahyuddin said that the coal mining company would still be given until the end of June to complete the divestment process.

KPC’s former shareholders, Rio Tinto and BP, were required to divest up to 51 percent of its stake in the coal producer two years ago as part of the mandatory divestment requirement stated in the company’s contract of works.

Bumi Resources, KPC’s new owner, had already sold 18.6 percent of the company’s shares to East Kutai regency’s authority immediately after it took over the mining company last year. It means that the company needs to sell another 32.4 percent in order to complete the mandatory divestment program. (*)