Local investor interested in Ombilin coal mine

State Minister for Investment and State Enterprises Development Rozi Munir said in Tuesday that a local investor had expressed interest to acquire the Ombilin coal mine in Sawah Lunto, West Sumatra from the state owned coal mining company PT Bukit Asam.

"Negotiations in the divestment of the Ombilin coal mine is underway. The offer made by the local company is quite promising," he told newsmen. But he refused to name the investor.

The Ombilin coalmine is currently operated by PT Bukit Asam, but the later plans to divest the high-cost coal mine as part of its privatization. The company, which will focus its coal operation in South Sumatra, said the divestment of the coalmine is necessary to make the company more attractive to foreign investors.

Bukit Asam earlier planned to hand over the Ombilin operation to the local government but the later declined the offer saying directly operating the coal mine would only cause a financial burden to its budget.

Rozi also said that his office and the Ministry of Mines and Energy was working on a plan to streamline the government's policy on the utilization of the royalties paid by coal mine investors. At present, coal investors are required to hand over about 13 percent of the coal production as royalties. About 9 percent of the 13 percent royalties should be used for coal development purpose. But the Ministry of Mines and Energy, which manages the funds, often misappropriated the use of such money. (*)