Dispute won't stop mine sale: New Hope

Dispute won't stop mine sale: New Hope

Tan Hwee Ann, Bloomberg, Australia

New Hope Corp., which is selling a stake in Indonesia's
biggest coal mine, said the sale won't be stopped by a reported
legal dispute between Indonesian buyer Edwin Soeryadjaya and a
former stakeholder of the mine.

New Hope on Feb. 8 agreed to sell a 40.8 percent stake in the
Adaro mine in South Kalimantan and half of a coal terminal for
US$378 million to businessmen led by Soeryadjaya, the son of the
founder of Indonesia's largest carmaker, PT Astra International.

Sukanto Tanoto, another Indonesian businessman, is claiming he
has a preemptive right to buy the stake and is threatening to sue
all parties involved in the transaction, the Australian Financial
Review reported today, citing lawyer Lucas who it says is
representing Tanoto.

"That's not right," about the preemptive right, said New
Hope's Chairman Robert Millner in Sydney in an interview.
"There's no effect whatsoever on New Hope at this stage."

New Hope is selling its Indonesian assets after prices for
power station coal rose to a record last year as China cut
exports to meet domestic demand. Coal demand within Indonesia is
set to surge by 2008. New Hope said it may use proceeds to double
output at its Australian mine or return cash to investors.

Soeryadjaya controls PT Dianlia Sepymukti which owns 51
percent of Adaro.

Tanoto in 2002 was forced to sell his 40 percent stake in
Adaro for $44 million to Soeryadjaya, after defaulting on a loan
to Deutsche Bank AG, the Australian Financial Review said. Tanoto
obtained a ruling from the Jakarta High Court on Feb. 25 which
said the 2002 sale was legally flawed.

Under the ruling, Tanoto had a preemptive right to buy New
Hope stake in Adaro, his lawyer Lucas said, the paper reported.