Local investor backs bid for KPC stake<\/p>\n
JAKARTA (JP): East Kalimantan said on Tuesday that a local
\ninvestor was backing the province's bid to acquire a 51 percent
\nstake in foreign owned coal mining company PT Kaltim Prima Coal
\n(KPC) operating in the province.<\/p>\n
\"It's a local investor with much (mining) experience,\" East
\nKalimantan Governor Suwarna Abdul Fatah said on the sidelines of
\na hearing between several governors of resource-rich provinces
\nand House of Representatives Commission VIII for mines and energy
\naffairs.<\/p>\n
Suwarna refused to name the investor, saying that the
\ninformation was confidential.<\/p>\n
East Kalimantan has been urging the central government to
\nallow it to obtain a 51 percent stake in KPC, though never
\ndisclosing its source of funding.<\/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
Under its contract of work, KPC must gradually divest at least
\n51 percent of its shares between the fifth and the 10th year of
\ncommercial production, which began in 1992.<\/p>\n
The company must sell the shares to either individual local
\ninvestors, the government or Indonesian state-owned or private
\nenterprises.<\/p>\n
At present, the East Kalimantan government is the sole bidder
\nfor KPC's stake.<\/p>\n
The government has said it will only approve East Kalimantan's
\nbid if the latter could provide details of its funding source and
\nthe conditions attached.<\/p>\n
The province is allowed to seek third party funding as long as
\nthe party is Indonesian.<\/p>\n
But thus far, East Kalimantan and KPC remain in dispute as to
\nhow much the company must divest this year.<\/p>\n
According to KPC's shareholders, the company must divest only
\n44 percent of its shares to local investors this year.<\/p>\n
\"We're still fighting to get the 51 percent stake,\" Governor
\nSuwarna went on to say.<\/p>\n
He said he hoped the Ministry of Energy and Mineral Resources
\ncould mediate in negotiations between the province and KPC.<\/p>\n
\"We're hoping that minister Purnomo will become our mediator,\"
\nhe said in reference to Purnomo Yusgiantoro, the minister of
\nenergy and mineral resources.<\/p>\n
Suwarna further denied earlier media reports that the province
\nagreed to an independent lawyer solving the dispute.<\/p>\n
Local media and The Jakarta Post quoted Ministry of Energy and
\nMineral Resource's secretary-general Djoko Darmono as saying that
\nthe province and KPC would settle their differences through an
\nindependent lawyer.<\/p>\n
Djoko said that lawyers representing both sides made different
\nevaluations of KPC's divestment terms, so that they agreed to
\nappoint an independent one.<\/p>\n
Saleh, however, said the province preferred to discuss the
\nissue without involving outside parties.<\/p>\n
\"In settling this issue, let's come face to face, their lawyer
\nand ours, and then exchange arguments to find out who is right,\"
\nhe explained.<\/p>\n
According to him, the appointment of an independent lawyer had
\nbeen KPC's suggestion.<\/p>\n
Before East Kalimantan, state-owned tin mining company PT
\nTambang Timah became the first to bid for KPC's stake in 1999.<\/p>\n
Timah withdrew its bid upon deeming KPC's shares too
\nexpensive.<\/p>\n
In 1999, the government valued a 30 percent stake in KPC at
\nUS$175 million. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/local-investor-backs-bid-for-kpc-stake-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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