BP to sell Kaltim Prima Coal for $500million

BP has agreed to sell its 50 per cent interest in the Indonesian coal mining company PT Kaltim Prima Coal to PT Bumi Resources for $500million.

BP announced today that it has agreed to sell its 50 per cent interest in the Indonesian coal mining company PT Kaltim Prima Coal (KPC) to PT Bumi Resources, an Indonesian-controlled resources company.

BP’s equal partner in KPC, Rio Tinto, has reached a similar agreement with the result that, on completion of the sale, KPC will be wholly owned by Bumi Resources.

Bumi Resources will purchase BP and Rio Tinto’s interests in KPC together for $500million, in cash including assumed debt, which will divided equally between BP and Rio Tinto. Subject to approval by PT Bumi Resources shareholders and other approvals, the parties anticipate completion of the deal in October 2003.

Having sold its other coal interests in 1989-90, BP’s shareholding in KPC is its only interest in coal operations worldwide.

KPC operates a coal mine located near Sangatta in East Kalimantan, Indonesia. The mine produces around 18 million tonnes of steaming coal annually for exports to markets in the Asia Pacific region, Europe and the United States.