Govt won't seek to solve KPC dispute through arbitration<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government will not go to international arbitration to
\nresolve the protracted dispute over the divestment of a 51
\npercent stake in coal mining company PT Kaltim Prima Coal (KPC)
\nas it sees little chance of winning the case, a senior official
\nfrom the Ministry of Energy and Mineral Resources said on Friday.<\/p>\n
As such, the government would rather resolve the dispute over
\nthe stake's price by appointing an independent agency, which
\napproach had also been agreed upon by KPC, to appraise the value
\nthe stake, Djoko Darmono, the ministry's secretary-general, told
\nreporters.<\/p>\n
Djoko did not name the independent appraiser in question but
\nhe said the government would pay the agency US$500,000 for its
\nservices.<\/p>\n
\"The government would rather spend $500,000 on the payment of
\nan independent valuer than go to international arbitration,\"
\nDjoko was quoted by Antara as saying.<\/p>\n
He said the arbitration process was too long and the
\nIndonesian government had never won any dispute in an arbitration
\nforum.<\/p>\n
KPC, which operates a huge coal mine in Sangatta, East
\nKalimantan, is equally owned by Anglo-Australian mining firm Rio
\nTinto and Anglo-American energy firm BP PLC.<\/p>\n
Under the contract signed with the government in the 1980s, it
\nis obligated to divest up to a 51 percent stake to the Indonesian
\ngovernment or companies owned by Indonesians after ten years of
\noperation.<\/p>\n
Despite two years of negotiations, no agreement has been
\nreached over the price. The company values its 51 percent stake
\nat $453 million, while the government has set the price at $320
\nmillion.<\/p>\n
The East Kalimantan provincial administration, which is also
\ninterested in the 51 percent stake and has named a lower price,
\nhas filed a suit against the coal company with the South Jakarta
\nDistrict Court on charges of intentionally delaying the
\ndivestment.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-wont-seek-to-solve-kpc-dispute-through-arbitration-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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