Govt reluctant to further involve in KPC divestment

Govt reluctant to further involve in KPC divestment

The Jakarta Post, Jakarta

The government signaled on Friday that it would not interfere
further in the divestment process of PT Kaltim Prima Coal's (KPC)
stake, calling on the coal mining company to directly negotiate
with the potential buyers of the 51 percent share sale.

Djoko Darmono, the secretary general of the Ministry of Energy
and Mineral Resources, said the government considered its job to
be limited to selecting the companies to buy KPC's stake. It
would not be involved in price negotiations between KPC and the
selected companies.

Djoko made the statement amid reports that David Salim, a
relative of tycoon Liem Sioe Liong, was seeking to buy some of
the stake via a partnership with the companies owned by the East
Kutai regency and East Kalimantan province.

"The government's job is limited to selecting buyers for the
51 percent stake in KPC. As for the partners of the regional
administrations, the central government has no idea about them,"
Djoko was quoted by Antara as saying.

The government has appointed state-owned coal mining company
PT Bukit Asam to buy a 20 percent stake and allowed Perusahaan
Daerah Pertambangan Energi Kutai Timur, a company owned by the
East Kutai regency and Melati Bhakti Satya, which is owned by the
East Kalimantan province, to buy the remaining 31 percent.

KPC, which is equally owned by Anglo-Australian mining giant
Rio Tinto and Anglo-American energy giant BP PLC, is located in
Sangatta, East Kutai regency, East Kalimantan.

Under the contract, the company must sell 51 percent of its
stake to either the government, state-owned companies,
Indonesian-controlled private companies or Indonesian citizens
this year.

PT Intan Bumi Inti Perdana, which is owned by David Salim,
reportedly has been appointed by the East Kalimantan provincial
and East Kutai regency administrations to buy the 31 percent
stake.

"We have chosen Intan because we believe the company has a
strong commitment to the province," East Kalimatan provincial
secretary Syaiful Teteng said.

David has been rumored to be the main financial backer for
East Kalimantan and East Kutai in their struggle to gain control
of the 51 percent stake in KPC. But he remains a mysterious
figure, never granting an interview with the local press.

There has been speculation that he also will finance the
purchase of another 20 percent stake in KPC by Bukit Asam -- a
move that would almost certainly allow him to control the
company.

Djoko said a thorough screening process should be carried out
on East Kutai and East Kalimantan's companies and their partners
to ensure financial capability and accountability.

But, he said, the government would not probe the company
because it was a business matter.

"It is KPC which has to carry out the due diligence
screening," Djoko said.