Province 'drops' lawsuit against KPC

Province 'drops' lawsuit against KPC

JAKARTA: East Kalimantan provincial government has dropped
part of its legal case to take over PT Kaltim Prima Coal, in a
move toward ending a messy ownership dispute over the nation's
most profitable coal mine.

But Anglo-Australian mining company Rio Tinto PLC, which owns
Kaltim Prima in a joint venture with BP PLC, said Thursday that
it wouldn't sell a majority stake in the mine until East
Kalimantan removes all legal action against the company.

In a newspaper advertisement Thursday, the provincial
government's lawyers said they had instructed the court to remove
the attachment orders on the shares. But the lawyers said East
Kalimantan will continue to pursue its lawsuit against Kaltim
Prima for failing to sell it the stake.

Rio Tinto's Indonesia President Lex Graefe said Kaltim Prima
wouldn't proceed with any sale until East Kalimantan removes its
lawsuit.

"The offers won't be made until all litigation is removed,"
Graefe said -- Dow Jones