Negotiation over KPC divestment plan extended

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that the negotiation of the inter-government team on the divestment of PT Kaltim Prima Coal?s 51 percent stake had been extended to ensure that the final decision would not ignore the local people?s aspiration, Bisnis Indonesia reported on Thursday.

"We are still waiting for the decision of related ministers about the KPC divestment plan. The negotiation has been extended so that the decision will satisfy all interested parties," the minister was quoted as saying.

At present Minister of Home Affairs has been also involved in the negotiations. "Minister of Home Affairs Sabarno has approached the East Kalimantan authority so that the problem could be solved," Purnomo added.

Purnomo earlier said that that the team had decided not to give exclusive rights to the East Kalimantan provincial administration in taking over KPC?s 51 percent stake.

"The inter-government team has recommended the ministry of energy and mineral resources not to give exclusive rights to the East Kalimantan authority to buy the 51 percent stake in KPC. The winner will comprise of several bidders," the minister said.

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.

However the divestment program does not run as expected due to dispute with the East Kalimantan provincial administration, which recently filed a legal suit against the existing shareholders for allegedly barring it from bidding the 51 percent share.

Besides the East Kalimantan administration, several other local investors have also filed their bids to buy KPC?s 51 percent stake. They include PT Intam Bumi Inti Perkasa (IBIB), which is owned by David Liem, PT Borneo Batubara (owned by Reynaldo Thamrin), PT Bumi Resources (Bakrie Group). PT E Securities, and PT Nusantara (owned by Prabowo Subyanto). Several state owned companies are aslo reported to have found a consortium to buy KPC?s 51 percent.

A number of state owned companies including state owned electricity company PLN, state owned coal mining company PT Batubara Bukit Asam, and general mining company PT Aneka Tambang have also expressed their interest to buy KPC?s 51 percent stake. (*)