BHP to sell 80% stake in Arutmin

BHP to sell 80% stake in Arutmin

Dow Jones, Melbourne

BHP Billiton (BHP), an Australian-based global resources company, said Tuesday it will sell its 80 percent stake in Indonesian coal operation PT Arutmin Indonesia to PT Bumi Resources for US$148 million.

Arutmin operates two thermal coal mines in South Kalimantan that together produce 11 million metric tons a year.

After the sale BHP Billiton will continue to provide marketing services to the mines. BHP Billiton has an agreement to market 75 percent of Arutmin's production.

In a statement, BHP Billiton said it was required by the Indonesia government to sell down its interest in Arutmin to allow majority Indonesian ownership.

BHP Billiton's president of energy coal, Mike Oppenheimer, said the sale was done on a "sound commercial basis," while the marketing agreement "provides a strong platform for repositioning and further developing our investments in Indonesia."

BHP Billiton's continuing interests in Indonesia comprise management of PT BHP Kendilo Coal Indonesia, a thermal coal mine in East Kalimantan. It also has a range of advanced exploration developments.

The other 20 percent of Arutmin is held by PT Bakri and Brothers.