KPC divestment to be finalized soon

The government is expected to take a final decision soon on the divestment program of the East Kalimantan coal mining giant PT Kaltim Prima Coal (KPC) after both sides completed a marathon negotiation process, according to an official..

Director general of geology and mineral resources Wimpy S. Tjetjep said government was represented by the directorate general of geology and mineral resources in the negotiation talks. He added that the results of the talks would be used by Minister of Mineral Resources and Energy Purnomo Yusgiantoro to take the final decision on the divestment program.

Wimpy told reporters that the government and the KPC team had completed negotiation process.

KPC was supposed to have divested 37 percent shares last year according to its contract with the government. But the plan could not be materialized after the East Kalimantan administration, which will buy the KPC shares, insisted that KPC must divest a 51 percent stake according to the contract. The ministry had earlier suggested a 44 percent stake.

Wimpy declined to speculate whether KPC would finally divest a 51 percent stake.

Asked about the selling price, Wimpy said that the price had increased from the level offered last year, but he did not provide figure.

KPC is Indonesia's second largest coal producer with annual output of 14 million tons in 2000, equally owned by Beyond Petroleum and Rio Tinto mining group.(*)