KPC could file complaints to international arbitration panels: Official

East Kalimantan-based coal mining giant PT Kaltim Prima Coal (KPC) could file complaints to international arbitration panels against the Indonesian government if the East Kalimantan provincial administration keeps forcing the company to sell to it its shares, a senior government official said on Saturday, East Kalimantan-based Kaltim Post daily reported.

The coal contract of work signed by KPC and the government does not mention any preferential rights for East Kalimantan to buy 51 percent stake in the firm, said Mahyudin, a senior staff member of the minister of energy and mineral resources. He was speaking in a dialog forum on KPC share divestment held in Samarinda on Saturday.

East Kalimantan still insists that it become the preferred bidder for 51 percent of KPC shares, which are set to be divested end-June. But, the central government and KPC maintain that other investors are allowed to buy the shares.

?KPC?s shareholders could file complaints to international arbitration panels if is forced to sell its shares to East Kalimantan,? Mahudin was quoted as saying. Rio Tinto and BP Plc equally own the company.

The central government made clear last week that KPC shares would be sold to state enterprises, the East Kalimantan administration, and private investors.

KPC, which operates huge coalmines in Sangatta in East Kutai Regency, East Kalimantan, is scheduled to sell by end-June 51 percent of its shares to Indonesian investors. It is a mandatory divestment program.

East Kalimantan government officials in Saturday?s dialog forum stressed again the province?s preferential rights to buy KPC shares. They argued KPC?s contract did not specifically mention that the central government or any other investors can buy the shares.

?So far we have got nothing from our natural resources. The share divestment could be help improve the welfare of people in East Kalimantan. Kaltim is a rich province, but its people remain poor,? said East Kutai regent Awang Faroek Ishak in the dialog forum which was also attended by KPC president director Noke Kiroyan.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro, who had been scheduled to speak in the dialog forum, did not come to Samarinda on Saturday. (*)