Ministry values KPC 51 percent shares at US$400m: East Kalimantan official

The ministry of energy and mineral resources has valued 51 percent shares in coal mining company PT Kaltim Prima Coal (KPC) at US$400 million, according to a senior official at the East Kalimantan provincial administration.

?I have no idea if the valuation by the ministry has been accepted by the company,? secretary of the provincial administration Sayif Syafran was quoted by local daily Radar Kaltim as saying recently.

For its part, the province valued the 51 percent shares at $350 million, Sayif said.

No ministry officials are available on Saturday to confirm Sayif?s statement.

KPC?s shareholders ? Anglo-Australian mining giant Rio Tinto and Anglo-American energy giant BP ? have agreed to divest 51 percent of their shares in the company to meet their contractual obligation. Under the contract, all coal contractors, including KPC, have to sell up to 51 percent of their shares to the Indonesian government, state companies, Indonesian-controlled private companies and Indonesian citizens after ten years of production.

Sayif said the provincial administration, which is interested to buying all the 51 percent shares, was now in the phase of negotiating with KPC on the price of the shares.

According to Sayif, KPC?s shareholders have set the price for the 51 percent shares at $880 million, which the province considered too high.

This however contrasted with a recent statement made by director general of geology and mineral resources at the ministry Wimpy S. Tjetjep that the $880 million price set by KPC?s shareholders was not for 51 percent shares but 100 percent shares.

KPC had not yet determined the price for 51 percent shares, Wimpy said.

According to Wimpy, the ministry would meet with KPC?s shareholders on June 21 to talk about the price for the 51 percent shares.

In a related development, Radar Kaltim reported that KPC had agreed to hold a meeting with the provincial council on July 4 or 5. (*)