No more negotiation over Inalum acquisition price: Hatta

Coordinating Minister for the Economy Hatta Rajasa said that the government would no longer negotiate the takeover price of PT Indonesia Asahan Aluminium (Inalum) with the Japanese consortium whose contract in operating the aluminum smelting giant in Asahan, North Sumatra, will expire at the end of October of this year.

Hatta was quoted by Investor Daily on Monday as saying that the government will hold on to the valuation made by the Finance and Comptroller Agency (BPKP), and any price difference will be settled via arbitration process.

?What?s clear is that we?ll no longer negotiate. We?ll hold on to the BPKP figure. If later there is a discrepancy (in the price) that we must pay, it will be settled at the arbitration,? he said.

The BPKP valued Inalum assets at US$390 million, while the Japanese side put a book value of $650 million. Hatta said that the price difference has now narrowed to around $100 million.

As Nippon Asahan Alumina (NAA)?s 30-year contract in managing Inalum will expire on October 31, 2013, it will have to hand over its 58.8 percent shares in the firm to the Indonesian government, which holds the remainder shares. The two sides, however, have been engaged in protracted negotiation over the acquisition price, with Minister of Industry MS Hidayat said a couple of months ago that the lingering price dispute may have to be settled via international arbitration.

There have been a number of local investors including state-controlled mining firm PT Aneka Tambang, a consortium of local administrations, and PT Toba Sejahtera which have expressed interest to acquire Inalum. (*)