Plan on coal mining divestment opposed

Plan on coal mining divestment opposed

JAKARTA (JP): The Association of Indonesian Mining
Professionals (Perhapi) has called on the government not to
intervene in the mandatory divestments of foreign coal mining
contractors.

Association chairman Herman Afif Kusumo said yesterday foreign
mining companies should be allowed to select the companies buying
their shares.

"Let them choose companies which they think are professional,
reliable and experienced," Herman said.

Herman made the remarks following a report that Director
General of Mining Adjat Sudradjat had ordered foreign coal mining
companies to divest their shares through direct private
placements to certain local companies.

Under mining contracts, foreign coal mining contractors are
obliged to divest a part of their shares after five years of
production through three alternative means decided by the
government.

Contractors first have to offer their shares to the
government.

In cases when the government turns down the offer, the
government decides if the contractors have to list their shares
on the stock market or sell them to locally owned companies
through direct private placement.

PT Kaltim Prima Coal (KPC), the country's largest coal
producer based in East Kalimantan, will sell 23 percent of its
shares to fulfill the mandatory requirement.

Adjat said he wanted the company to sell the shares directly
to four local companies.

The companies are state coal mining company PT Tambang
Batubara Bukit Asam, military foundation Yayasan Markas Besar
ABRI (Yamabri), PT Iroda and PT Pakarti Trimitra.

Sources have said some of the companies were experiencing
shortages of cash, while others had no experience in coal mining.

Iroda and Pakarti are reportedly owned by family members of
top officials.

Herman said if the Ministry of Mines and Energy wanted KPC to
divest its shares through direct private placement, it had to
give the company the freedom to choose would-be buyers for their
shares, or it should give the company alternative firms to
choose.

"It's time for us to apply fair and transparent policies,"
Herman said. (jsk)