KPC asset? value lowered to $1.4 billion

The government and mining giant PT Bumi Resources have agreed to value the entire shares of East Kalimantan-based coal miner PT Kaltim Prima Coal at US$1.452 billion.

?With the agreement, KPC can now carry out its divestment program,? Director General of Geology and Minerals at the Ministry of Energy and Mineral Resources Simon Sembiring said during the national congress of the Association of Indonesian Mining Professionals (Perhapi) on Thursday in Palembang.

Bumi initially valued the KPC asset at $1.98 billion but it later lowered the value to $1.7 billion as the government said the price was too high.

Bumi took over the entire stake of the coal company from mining giant Rio Tinto and energy giant BP PLC for only about US$500 in 1992. However, the company is still required to follow the mandatory divestment program imposed on the former shareholders.

Under the divestment program, KPC should divest up to 51 percent to local investors. Bumi, KPC's new shareholder, 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.

Aside from KPC, Bumi also wholly owns PT Arutmin Indonesia, a big coal miner in South Kalimantan. (Robert).