PTBA and East Kalimantan want majority stake in KPC

The state-owned coal producer PT Tambang Batubara Bukit Asam (PTBA) and the East Kalimantan provincial administration insisted that they want a majority stake in the coal company PT Kaltim Prima Coal (KPC), refusing to buy the remaining 32.4 percent of KPC shares after the East Kutai regency had bought 18.6 percent of shares, several leading newspapers including Kompas reported on Thursday.

This was disclosed by secretary general for the ministry of energy and mineral resources Djoko Darmono to Kompas newspaper in Jakarta on Wednesday. According to Djoko, East Kalimantan and PTBA have refused to buy the remaining 32.4 percent of KPC shares ? 20 percent for PTBA and 12.4 percent for East Kalimantan.

Therefore, the government will explore the alternative ways to complete the divestment of the KPC?s ownership. Djoko added that the divestment process will continue and the purchase of 18.6 percent shares by East Kutai regency would not be questioned as the deal came in accordance with the government rules.

Under the contract, KPC has to sell 51 percent of its shares to local investors after ten years of production and the government has decided to offer the shares to PTBA, East Kalimantan and East Kutai.

On Monday, PTBA submitted two alternative ways of taking a 51 percent stake in KPC. Under the first alternative, PTBA will itself buy the 51 percent shares. The second alternative is to buy the majority stake through a consortium comprising of PTBA, East Kalimantan, East Kutai administrations and PT Intan Bumi Inti Perdana, a private company.

Last year, PTBA, Perusda Melati Bhakti (owned by East Kalimantan), Perusda Pertambangan and Energi (owned by East Kutai regency) and PT Intan Bumi Inti Pradana (owned by businessman David Salim) agreed to form a consortium called PT Melati Intan Bhakti Satya to buy KPC's 51 percent shares.

PTBA will have a 7.8 percent ownership (equivalent to 3.98 percent KPC shares), East Kalimantan and East Kutai companies 12.2 percent (equivalent to 6.22 KPC shares) and Intan Bumi 80 percent (equivalent to 40.20 percent KPC shares) in the consortium.

But the consortium?s fate hangs in the air following the sale of 18.6 percent KPC shares to the East Kutai regency for around US$104 million on October 13 by its new owner PT Bumi Resources. (*)