Salim to buy 31% of coal mining company KPC

The Jakarta Post, Jakarta

David Salim, a relative of troubled tycoon Liem Sioe Liong, reportedly has been appointed by the East Kalimantan provincial and East Kutai regency administrations to buy 31 percent of coal mining company PT Kaltim Prima Coal.

The businessman reportedly will purchase the shares through East Kutai-owned firm Perusahaan Daerah Pertambangan Energi Kutai Timur and East Kalimantan-owned Melati Bhakti Satya, according to Bisnis Indonesia.

The paper quoted East Kalimantan provincial secretary Syaiful Teteng as saying the province and the regency had agreed to form a partnership with PT Intan Bumi Inti Perdana, which is owned by David, to buy the 31 percent share of Kaltim Prima Coal (KPC).

"We have chosen Intan because we believe the company has a strong commitment to the province," he said.

The report follows a government decision to allow the East Kalimantan and East Kutai-owned firms each to buy a 15.5 percent stake in KPC. The remaining 20 percent will be offered to state- owned coal mining company PT Bukit Asam.

The government has the right to buy up to a 51 percent stake in KPC, which is jointly owned by Anglo-Australian mining giant Rio Tinto and Anglo-American energy giant BP PLC.

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.

No KPC official was available for comment on Tuesday, but sources said the company's board of commissioners met on Tuesday at its mine in Sangatta, East Kalimantan. The commissioners reportedly have not been informed of David's latest bid for the KPC shares.