KPC demands US$440-$450m for 51 percent stake

The country?s largest coal mining company PT Kaltim Prima Coal (KPC) demands a price of between US$440-$450 million for its 51 percent stake which would be acquired by the East Kalimantan administration, according to a top official of the province.

East Kalimantan treasurer HS Sjafran was quoted by the local Kaltim Post daily as saying that the price asked by KPC was much higher than the initial price estimate of around $297 million.

Sjafran said that the price estimate of the ministry of mineral resources and energy (directorate general of geology and mineral resources) was also lower of between $300-319 million.

After nearly two years of debate and negotiation, the central government in Jakarta finally asks KPC to divest 51 percent shares to the East Kalimantan administration immediately. The company initially was only willing to divest up to 37 percent stake.

Sjafran accused KPC was now trying to delay its divestment obligation by putting a very high price to the shares.

The divestment will automatically cause KPC to lose control of the company. The East Kalimantan administration has already teamed up with a Jakarta-based investor to acquire the 51 percent shares of KPC.(*)