Firms affected by KPC dispute to lodge court objection
Firms affected by KPC dispute to lodge court objection
Moch. N. Kurniawan The Jakarta Post Jakarta
Companies whose assets have been seized by the South Jakarta District Court because of their links to the owners of coal- mining giant PT Kaltim Prima Coal (KPC) will lodge a third-party objection, according to a lawyer.
Lawyer Fredrik Pinakunary of the Mulya Lubis and Maulana law firm said on Thursday that the assets did not belong to KPC, but rather to separate entities.
"We'll ask the court to release the assets because the verdict is wrong," he told The Jakarta Post.
The court last month issued a ruling sequestering KPC assets following a US$776 million lawsuit filed last year by the East Kalimantan administration against KPC over a delay in the divestment of company shares.
KPC, which is equally owned by Anglo-Australian Rio Tinto mining group and British-American energy giant BP Plc., operates a vast coal mine in the Sangatta area of East Kalimantan's East Kutai regency.
The company was supposed to have divested a 51 percent stake to local buyers last year, but this was delayed for various reasons, including disagreement over the price of the shares.
The East Kalimantan administration, which claims to be the preferred bidder for the KPC stake, accused the company of deliberately delaying the divestment obligation.
Among of the assets put under the court's control are working interests in the Tangguh liquefied natural gas project in Papua province which are owned by BP Muturi, BP Berau and BP Wiriagar; shares of Kelian Pty in an East Kalimantan-based gold mining operation; and the assets of the state-owned oil and gas firm Pertamina in the Arcadia Tower office building in South Jakarta.
Construction of the Tangguh project is estimated to cost $1.5 billion. BP and Pertamina are expecting to win a contract from China for the supply of 3 million tons of LNG annually starting in 2005.
Fredrik, who has been appointed to represent the affected companies, said the court's ruling had not caused difficulties for his clients in running their businesses.
Separately, ministry of energy and mineral resources spokesman Nurwinakun said the government would undertake a special study into ways of settling the KPC share divestment problem.
The team would comprise officials from the political and security, economic, finance, and mines and energy ministries, the police, and the Attorney General's Office, he said.
"The government team is being set up because the KPC share divestment process has taken an unexpected (serious) twist. It may disrupt security and order, (and the) investment climate. It may disturb relations between states also," he was quoted by Reuters as saying.
KPC missed a March-31 deadline to complete the divestment program due to the East Kalimantan lawsuit.
East Kalimantan has declined to drop the lawsuit until KPC agrees to sell the entire 51 percent stake to the local government.
But KPC insists that according to its existing contract of work with the central government, it has no obligation to sell the entire stake to the provincial administration. KPC intends to invite bids for the shares.
The government and KPC's owners recently agreed to extend the deadline until June 30. They also agreed to maintain 100 percent of the value of KPC shares at $822 million.
But there has been concern that the further delay could prompt angry East Kalimantan people to blockade KPC's operations.
KPC, which has annual output of 17 million tons, exports a significant portion of its coal production.
The mining company had in the past numerous disputes with its labors which led to several blockades of its operation and suspension of its coal exports.