Government narrows options for settling dispute with Cemex

Government narrows options for settling dispute with Cemex
Published: 20 December 2004

The government has selected six out of 16 possible options for settling a dispute with  Cemex SA over the sale of its 51 per cent stake in state-run cement firm PT Semen Gresik, the Koran Tempo reported quoting State Minister for State Enterprises Sugiharto.  

A government negotiation team will meet with Cemex to present the six options one by one, Sugiharto said.  

He declined to reveal the options. Sugiharto had earlier indicated that the government may offer Cemex the opportunity to invest in a new cement plant which should help meet Indonesia’s rising cement demand.  

An option to sell the government’s 51 per cent stake in Semen Gresik to Cemex was ruled out by Coordinating Minister for the Economy Aburizal Bakrie last week.  

The government has decided not to sell the stake, as previously agreed under a put option deal with Cemex, due to strong anti-privatization protests from Semen Gresik workers and local politicians.  

The put option deal expired in 2001, leaving Cemex with only a 25.53 per cent stake in Semen Gresik.  

Cemex then filed an arbitration at the International Center for Settlement of Investment Disputes in Washington last year.  

Bakrie said last week that he expects to settle the dispute out of court by Jan 28 -- within the first 100 days of the new government of President Susilo Bambang Yudhoyono.