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Tue, 28 Aug 2001

JP/Govt appoints consultant to value KPC stake

Govt appoints consultant to value KPC stake

JAKARTA (JP): The government has appointed a consultant to appraise the value of the 51 percent stake in East Kalimantan- based coal mining firm PT Kaltim Prima Coal (KPC) on offer for divestment.

The director general of geology and mineral resources at the Ministry of Energy and Mineral Resources, Wimpy S. Tjetjep, confirmed the appointment of the consultant saying that it should speed up the protracted negotiation over KPC's share price.

"We have good will here ... We hope it (the negotiation) can be finished by the end of next month," he told the Jakarta Post.

Wimpy, however, refused to name the consultant, but an official at the East Kalimantan provincial administration said the consultant was Kemal Syamsuddin.

According to Wimpy, if the price could not be agreed upon in September, the negotiation would take longer because KPC shareholders, Rio Tinto of Australia and Beyond Petroleum of Britain, planned to offer a new price in October.

Under its contract of works, KPC shareholders are required to divest a 51 percent stake in the company to a local entity this year.

The East Kalimantan provincial administration is the only party who has bid for the stake.

However, there is still a wide gap between the bid and the price offered for the stake, with KPC shareholders wanting to sell the stake at $448.8 million and the East Kalimantan administration bargaining at $319 million.

The appointment of an independent appraiser should help bridge the gap. However, the appointment of Kemal Syamsuddin was not done in consultation with KPC shareholders.

Rio Tinto spokeswoman Nunik Maulana said her party welcomed the government initiative, but said that the company had no clear plan as yet to work with the government consultant.

Nunik said that KPC shareholders would continue negotiations with the East Kalimantan administration on Friday.

KPC, which operates a huge coal mine in Sangatta, Kutai Timur regency, produces an average of 50,000 tons of coal a day and 15 million tons a year. (iwa)