Tambang Timah to buy 30% stake in Prima Coal

Tambang Timah to buy 30% stake in Prima Coal

JAKARTA (JP): Publicly listed state tin company PT Tambang
Timah said on Wednesday it planned to buy a 30 percent stake in
the country's largest coal mining company, PT Kaltim Prima Coal
(KPC).

The president of Timah, Erry Riyana Hardjapamekas, said the
company was currently negotiating the proposed purchase and
conducting a due diligence with Kaltim Prima, owned by British
Petroleum and Australian mining company Rio Tinto.

Erry said the deal was expected to conclude by the middle of
this year.

"The process is still ongoing, and hopefully an agreement will
be reached on the possibility of buying a 30 percent stake (in
Kaltim Prima)," Erry said after the company's general and
extraordinary shareholders meeting.

He also said Timah planned to acquire a stake in another
mining company by the middle of this year, but he declined to
name the company, saying it was still confidential.

The planned acquisitions are part of Timah's strategy to
diversify its business into "mineral mining sectors other than
tin". These sectors includes gold, coal and diamonds, he said.

The company is also conducting "greenfield explorations" for
minerals other than tin, and has also established cooperation
agreements with foreign companies to further its explorations, he
said.

Timah has set up a joint venture firm, PT Kutaraja Tembaga
Raya, with United States-based Phelps Dodge Australasia Inc. to
explore for gold and other minerals in Aceh, northern Sumatra.

At Wednesday's meeting, Timah's shareholders approved the
company's proposal to distribute 40 percent of its net profit in
1998 as cash dividends. The cash dividends will total Rp 205.88
billion (US$22.87 million).

The dividends will be Rp 409 per share, a sharp increase from
the Rp 141 per share paid out to shareholders last year.

The company also plans to use Rp 308.83 billion of its net
profits as cash reserves. These reserves will be used for
business expansion and diversification.

Timah's consolidated net profit rose by 192 percent last year
to Rp 518.83 billion due to the sharp depreciation of the rupiah
against the U.S. dollar.

The company, one of the world's major tin mining companies,
operates 33 large-scale inland mines on Bangka Island, South
Sumatra. It also operates seven fixed furnaces and five
crystallizers to process the tin ore.

Its tin metal production rose last year by 1.87 percent to
43,418 tons.

Erry said the company expected to produce a similar amount of
tin this year.

During Wednesday's meeting, shareholders also approved the
company's proposal to replace commissioners P.H. Silitonga, Dibyo
Kuntjoro and B.L Noormandiri with Yogo Pratono, Brig. Gen.
(retired) Moelyadi and Waryono Karno.

Erry, whose tenure ended this year, was reinstated as the
company's president.

Tambang Timah is one of the 10 state-owned firms that the
government, which owns a 65 percent stake in the company, plans
to privatize during the 1999/2000 fiscal year. The privatizations
are expected to raise Rp 13 trillion to help finance the state
budget. (das)