Legislators demand closure of KPC?s mining site
Saturday, July 19 2003 - 02:53 AM WIB
The legislators expressed their anger and demanded the closure of the company?s mining site after the local government?s legal consultant unveiled a proof that the company had sold its coal reserves through forward sales contract.
?We have to take a firm action and to show that East Kalimantan government and its people are serious in our plan to occupy and to stop KPC?s mining activities,? said Ridwan Suwidi, one of the council?s members.
Khairul Fuad, another legislator, also supported the protest against the KPC, asking the local mining office to boycott the coal producer.
East Kalimantan Governor H. Suwarna AF supported the threat to close the company?s mining site in Sangatta, East Kutai regency. The governor said he would cooperate with the East Kutai administration in mobilizing the residents to the Sangatta mining area.
The legal consultant of the East Kalimantan provincial administration, Didi Dermawan, had accused KPC of trying to steal all the company?s coal reserves through a forward transaction scheme.
He said the KPC had sold its coal deposits worth US$73 million or about Rp 600 billion under a forward sales agreement. According to him, the cash from the sales of the coal deposits which are technically still under the soil of East Kalimantan would be included in the company?s first semester financial report. He accused that the funds generated from the forward transaction would be used as dividend to the company?s shareholders Beyond Petroleum and Rio Tinto.
KPC?s government and public relations manager Nunik Maharani denied the charge addressed to the company which sells its coal under three brands, Prima, Pinang and Belawan.
?All the sales have been reported to the government,? she said. Nunik said that the local government might be confused with the company?s new coal brand Belawan. ?The production of this new coal product will be commenced this year,? she added.
The East Kalimantan government and KPC have been involved in a fierce legal battle after the company refused to sell part of its shares to the local government.
KPC, which operates a large coal mining area in East Kalimantan, is equally owned by world mining giants Rio Tinto and BP. Under its contracts of works, the company?s shareholders are required to divest 51 percent of their shares to local investors.
The mandatory divestment program has been delayed for at least three years due to a dispute over the percentage of the shares that must be sold to the central and local government. The local administration had demanded to buy all of the 51 percent stake.
According to the latest compromise, 31 percent of the 51 percent of KPC shares would be sold to the provincial administration and another 20 percent PT Batubara Bukit Asam. But the KPC management still refused the East Kalimantan government?s bid. (*)