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)