PT Rio Tinto clarifies

I am writing regarding your series of articles on the divestment of PT Kaltim Prima Coal (KPC), the latest of which appeared in the Dec. 4 issue titled Government urged to speed up KPC divestment.

The article says the East Kalimantan administration gets first priority for buying shares, as KPC's vast mining site is located in Sangatta.

While KPC shareholders -- namely, Rio Tinto and BP -- welcome Pemprov Kaltim's intention to be a potential shareholder in KPC, the same opportunity is available for other potential buyers, too.

Article 26 of the Coal Agreement (PKP2B) provides no priority or exclusivity to whom the KPC shares should be offered.

It is also incorrect that the East Kalimantan administration is the only party to bid for the shares. KPC has been contacted by many other Indonesian participants seeking consideration as possible buyers.

LEX GRAEFE

President Director

PT Rio Tinto Indonesia

Jakarta

Note: Thank you for your correction.

-- Editor