PTBA may cancel plan to buy KPC shares

State coal miner PT Batubara Bukit Asam (PTBA) may cancel its plan to buy a stake in East Kalimantan-based coal mining firm PT Kaltim Prima Coal (KPC) if its price is not reduced, PTBA president director Ismet Harmaini said Thursday.

?For us, the price of KPC shares is too high. Based on our calculations, the actual price should be lowered,? Ismet told a news conference.

KPC had formally offered to sell 51 percent of its shares to the Indonesian government, and the two parties had agreed on a US$822 million valuation of the entire shares of the company.

The government allocated 20 percent of the 51- percent stake in KPC to PTBA, while the remaining 31 percent was for East Kalimantan provincial administration.

Ismet urged the government to review its agreement with KPC shareholders about the price of its shares. He said the 51-percent shares should be priced at $600 million, based on PricewaterhouseCoopers? calculations.

Meanwhile, PTBA and East Kalimantan?s investors PT Melati and PT Pertambangan dan Energi, had failed to complete due diligence on KPC by January 31, the deadline set last July by the government and KPC shareholders.

Rio Tinto?s spokesman Ang Noor said that with the January 31 deadline being over, KPC had rights to sell its shares to other Indonesian parties.

So far, the government and KPC had not made it clear what to do next.

KPC, equally owned by Rio Tinto and BP Plc, operates a huge coalmine in East Kutai, East Kalimantan.

The divestment of 51 percent of its shares to Indonesian investors follows KPC's contractual obligations. (godang)