Minister approves demand for KPC to divest 51 percent shares this year
Monday, April 9 2001 - 04:00 AM WIB
Minister of Mineral Resources and Energy Purnomo Yusgiantoro has approved the demand of the East Kalimantan administration and parliament for coal mining giant PT Kaltim Prima Coal (KPC) to divest 51 percent shares this year, according to speaker of the East Kalimantan parliament Sukardi Djarwoputro.
"Although the meeting on Thursday was canceled, but we're not worried because the minister has given his approval verbally on the demand of the East Kalimantan administration and parliament for KPC to make a 51 percent divestment," Sukardi was quoted by the local Kaltim Post daily Sunday.
Sukardi said that a meeting involving East Kalimantan administration, KPC management, and the ministry was supposed to occur on Thursday over the requirement for KPC to make the 51 percent divestment.
KPC was supposed to already make divestment last year. But the divestment program has been delayed several times due to differences between the company and the East Kalimantan administration, which gets the priority to purchase the shares, in understanding divestment requirement stipulated in the KPC mining contract.
According to the East Kalimantan administration, KPC must divest 51 percent shares, but the company said that it is only supposed to divest 37 percent.
KPC is equally owned by Rio Tinto and Beyond Petroleum.
Petromindo.com earlier quoted secretary general of the ministry of mineral resources and energy Djoko Darmono as saying that the government had decided that KPC must divest 51 percent shares in the first quarter of this year, and that the East Kalimantan administration gets the first priority in purchasing the shares.
East Kalimantan was planning to invite local investor called PT Intan Jakarta to provide the full financing for the share purchase, with the province to get 10 percent of the shares for free. Some legislators have earlier demanded the provincial administration to disclose the owner of PT Intan and its business background.
Sources earlier said that Intan was owned by the Salim Group, once the country's largest conglomerate.
Meanwhile, Rio Tinto Indonesia general manager finance Lex Graefe told Petromindo.com that the ministry had sent a letter calling for the 51 percent divestment, but the KPC shareholders were stilly trying to clarify certain issues before responding to the letter. He declined to say what the issues were.(*)