No delay for KPC shares divestment: Official

The government is determined to materialize by the end of this month the divestment of 51 percent shares of East Kalimantan-based coal miner PT Kaltim Prima Coal (KPC), director general of the Ministry of Energy and Mineral Resources Djoko Dharmono said on Friday.

?There will be no delay. Time is short but we must do it,? said Djoko after attending a meeting of central government and East Kalimantan government officials in Jakarta, Bisnis Indonesia daily reported.

East Kalimantan governor Suwarna, East Kutai regent Awang Faroek and the province?s legislative council (DPRD) deputy chairman Chairul Fuad attended the meeting.

Djoko said in their meeting central government officials urged the East Kalimantan administration to drop its legal suit against KPC so KPC share divestment could be materialized by end June.

The meeting participants also negotiated the division of the 51 percent stake in KPC for the three buyer groups namely state enterprises, East Kalimantan administration and Indonesian private investors, Djoko added.

When asked about the deadline for East Kalimantan to drop its legal suit, which had been filed against KPC shareholders in the South Jakarta district court last year, Djoko said East Kalimantan?s DPRD needs to be consulted. ?Let us see what would happen in one or two days,? he said.

Meanwhile, Djoko said state coal miner PT Tambang Batubara Bukit Asam (PTBA) had expressed interest to buy 20-25 percent of the 51 percent shares of KPC.

PTBA among several state enterprises and private investors which had planned to buy KPC shares. The other state companies were general mining company PT Aneka Tambang, tin miner PT Timah Tbk and electricity company firm PT PLN.

The private investors include PT Nusantara Energy, PT Borneo Batubara Batuah and PT Bumi Resources Tbk. PT Centralink, a unit of Thailand?s energy conglomerate Banpu Plc, has also expressed interest to buy KPC shares.

The government and KPC?s shareholders Rio Tinto and BP Plc agreed early this year to divestment the 51 percent shares end-June. It is a mandatory divestment according to KPC?s contractual obligation.

KPC shareholders said however the share divestment can not be made if East Kalimantan does not drop its legal suit against them.

The East Kalimantan administration last year sued Rio Tinto and BP Plc in the South Jakarta district court for US$776 million in compensation for they delay to sell 51 percent of KPC shares to East Kalimantan. The province insisted that it become the preferred bidder for KPC shares.

KPC operates a huge coalmine in Sangatta in East Kutai, East Kalimantan. (*)