NGOs threaten to blockade KPC?s export activity if divestment fails

Non-governmental organizations (NGOs) in East Kutai regency, East Kalimantan threatened to blockade the export activity of coal mining giant PT Kaltim Prima Coal (KPC) if it fails to divest a 51 percent stake to the local government by the end-March deadline.

The local Kaltim Post daily said that the threat was made during a rally Monday, which was participated by more than one thousand people at the East Kutai parliament building.

KPC, which is equally owned by Anglo-Australian mining giant Rio Tinto and Anglo-American energy group BP Plc., operates a vast mining sites in Sangatta Area in East Kutai with annual coal production of around 17 million tons, mostly for export market.

KPC is obliged to divest a 51 percent stake to local investors. The central government has given a priority to the East Kalimantan provincial administration to purchase the stake.

The divestment program has been delayed for several times due to various reasons including differential over the share price. The latest deadline is March 31, 2002.

The central government and KPC shareholders agreed last week to value 100 percent of KPC shares at US$822 million. Meanwhile, the East Kalimantan government had also dropped its lawsuit against KPC and its shareholders.

With these latest developments, there seem to be reason optimism that the divestment program could be completed before the end-March deadline.(*)