MEMR questions ownership structure of Berau Coal

The Ministry of Energy and Mineral Resources (MEMR) has questioned the change in the share ownership and investment status of IDX-listed coal mining firm PT Berau Coal Energy Tbk (BRAU), which indirectly controls coal miner PT Berau Coal, reports said on Thursday.

PT Berau Coal, which operates mines in Berau Regency, East Kalimantan, holds the first generation coal contract of work (PKP2B). It started production in 1983. According to the contract, after 10 years of production, the company must divest up to 51 percent stake to the government or other national investors.

PT Berau Coal is 51 percent controlled by PT Armadian Tritunggal. While Armadian is an Indonesian company, it is 99.99 percent owned by BRAU, which in turn is 84.74 percent controlled by LSE-listed mining firm Asia Resource Minerals Pcl (ARMS). Having been controlled by ARMS, BRAU?s investment status has changed into foreign investment scheme (PMA).

Director for Coal Management and Development at the MEMR, Bambang Tjahjono was quoted as saying that the change in the investet status of BRAU into PMA leads to a breach of the PKP2B contract by PT Berau Coal, which stipulates that the company must be controlled by national investors.

Bambang said that the ministry has sent a letter dated April 23 to BRAU to seek for explanation. He added given the status, PT Berau Coal must divest up to 51 percent of its stake to national investors to fulfill the terms under the PKP2B.

Failing to comply with the PKP2B, he warned, PT Berau Coal risked its operation being suspended.

Bambang said that the ministry will pursue this matter after BRAU completes its planned extraordinary shareholders meeting to resolve other company problems.

Meanwhile, Singgih Widagdo, General Manager for Corporate Communication at BRAU, was quoted by Kontan as saying that his company will discuss the issue with the MEMR after the firm concludes its extraordinary shareholders meeting. (*)