KPC, E. Kalimantan still in dispute over divestment<\/p>\n
JAKARTA (JP): Shareholders of coal mining company PT Kaltim
\nPrima Coal and the local government of East Kalimantan are still
\nin dispute over the percentage of shares KPC must divest to local
\ninvestors this year, according to a senior government official on
\nFriday.<\/p>\n
Secretary-general at the Ministry of Energy and Mineral
\nResources Djoko Darmono said KPC's shareholders and the East
\nKalimantan government, which planned to buy KPC's shares, failed
\nto reach an agreement during a meeting on Thursday.<\/p>\n
\"They couldn't agree on how much of its stake KPC should
\ndivest this year,\" Djoko told reporters at his office.<\/p>\n
KPC is jointly owned by Anglo-Australian mining company Rio
\nTinto and British-American oil and gas company Beyond Petroleum
\n(BP)<\/p>\n
According to KPC's shareholders, Djoko had said that the
\ncompany would only need to divest 44 percent of its shares to
\nlocal investors this year.<\/p>\n
But the East Kalimantan government argued that the company
\nshould divest up to 51 percent of its shares.<\/p>\n
Under KPC's contract of work (CoW), KPC must gradually divest
\nup to 51 percent of its shares between the fifth and the 10th
\nyear of its commercial production, which started in 1992.<\/p>\n
The company must sell its shares to either individual local
\ninvestors, the government, or Indonesian state-owned or private
\nenterprises.<\/p>\n
So far, the East Kalimantan government remains the sole bidder
\nfor KPC's stake, after state-owned tin company PT Tambang Timah
\nwithdrew its bid in 1999 as it found KPC's shares too expensive.<\/p>\n
In 1999, the government valued a 30 percent stake in KPC at
\nabout US$175 million.<\/p>\n
\"After we've decided on the percentage of shares to be
\ndivested, we can discuss their value,\" Djoko explained.<\/p>\n
Djoko said that KPC and the East Kalimantan government would
\nappoint an independent lawyer to settle the dispute.<\/p>\n
\"It will be up to the lawyer to evaluate how much of its
\nshares KPC must divest this year,\" Djoko said.<\/p>\n
He said the disagreement between KPC and the East Kalimantan
\ngovernment concerned legal issues, which called for a lawyer's
\nexpertise.<\/p>\n
\"Each party's lawyers had made different evaluations of KPC's
\ndivestment terms, so they agreed to appoint an independent
\nlawyer,\" he said.<\/p>\n
Djoko added that the East Kalimantan government's bid to own
\nKPC's stake must, however, be approved by the central government.<\/p>\n
The East Kalimantan's government, he said, had yet to disclose
\nits funding source for acquiring KPC's stake.<\/p>\n
He noted that the East Kalimantan government could seek funds
\nfrom third parties, but cautioned that their sources should be
\nIndonesians.<\/p>\n
According to him, his office would be blamed if problems arise
\nin the future because of questionable funding sources of the East
\nKalimantan government.<\/p>\n
\"It must be made clear who is financing them and the
\nconditions attached to it,\" he said.<\/p>\n
Last year his office had planned to form a team to evaluate
\nthe East Kalimantan's government's funding sources, and the local
\ngovernment's ability to manage the mining firm.<\/p>\n
Djoko had then expressed concerns that without a clear vision,
\nKPC could become a nest of corruption, collusion and nepotism.<\/p>\n
He said the central government would evaluate the local
\ngovernment's proposal after it was clear how much of KPC's stake
\nthey could buy this year.<\/p>\n
Officials from Rio Tinto and BP were unavailable for
\ncomments.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kpc-e-kalimantan-still-in-dispute-over-divestment-1447893297",
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