Salim to buy 31% of coal mining company KPC

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.