Rio Tinto wants "satisfactory" end to KPC row
Thursday, April 18 2002 - 11:16 AM WIB
But Wilson was quoted as saying that Rio Tinto currently has no plans for such further investment in Indonesia.
"It isn't as though we have current plans for further major investment there in any case, but obviously if we did have we would be wanting to see satisfactory resolution of the current problems with KPC," Wilson told reporters in Melbourne after the company's annual general meeting.
Rio Tinto and its equal partner in Kaltim Prima, BP PLC, are in negotiations with the Indonesian government over their obligation to sell a 51% stake in KPC to Indonesian investors as part of an original agreement.
But those negotiations are being derailed by the provincial government of East Kalimantan, where the mine is situated. The provincial government claims Rio Tinto and BP have reneged on the contract to offload the 51% by last year, and is taking court action to take control of the majority stake.
Only last month, the joint venture partners and the Indonesian government agreed on an US$822 million valuation of the entire Kaltim Prima operation, paving the way for a sale. But the partners say they can't sell until the legal fight with East Kalimantan is resolved.
In late March, the Indonesian government and the Kaltim Prima partners agreed to a revised deadline of June 30 for selling the 51% stake.
Rio Tinto's Wilson said the dispute is a reflection of some understandable confusion over the process Indonesia is going through in extending greater autonomy to regional governments.
"What we are part of in effect here, I think, is this difficult process Indonesia is going through of granting greater regional autonomy but some of the ground rules of that process not being very clear to anyone, including those out in the regions," Wilson said. (*)