Govt sets up team to screen investors for KPC stake

A'an Suryana, The Jakarta Post, Jakarta

The government has set up a team to screen financial backers from the administrations of the East Kalimantan provincial and East Kutai regency in the purchase of a stake in coal-mining giant PT Kaltim Prima Coal (KPC), Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said.

"The due diligence team was set up last Thursday," Purnomo told legislators during a session with the House of Representatives Commission VIII for mining and energy.

The team comprises officials from the central government, East Kutai regency and East Kalimantan provincial administrations, he said.

Purnomo said that the team was tasked to, among other things, set up criteria and requirements for potential investors, to assess and evaluate investors and to make recommendations.

KPC, which operates a large coal-mining site in the Sangatta area of East Kutai regency in East Kalimantan, is obliged to divest a 51 percent stake to Indonesian investors. The stake is valued at US$419.2 million.

But the divestment process has been delayed several times due to various reasons. Both the East Kutai administration and the East Kalimantan provincial government have expressed interest in purchasing the stake. A number of private investors are also eying the stake, but they need to purchase it through the local governments.

The central government is expected to acquire a 20 percent stake in KPC, with the remaining 31 percent to be divided among potential investors.