Shareholders' meeting to decide KPC's future<\/p>\n
JAKARTA (JP): The shareholders of coal mining company PT
\nKaltim Prima Coal in East Kalimantan will meet here to decide on
\nthe company's future, following failed efforts to end a dispute
\nwith striking workers.<\/p>\n
KPC representative for Jakarta, Bambang Susanto said on Monday
\nrepresentatives of KPC's shareholders Anglo-Australian mining
\ncompany Rio Tinto and the British-American oil and gas company
\nBeyond Petroleum (BP) would hold a two-day meeting from Tuesday
\n(today).<\/p>\n
\"Tomorrow's discussion will likely cover every aspect of this
\nproblem, including the possibility of KPC pulling out from
\nIndonesia,\" Bambang told The Jakarta Post.<\/p>\n
He said the meeting was part of the company's regular
\nshareholders meeting, which is held at least twice a year, to
\ndiscuss the company's performance.<\/p>\n
The giant coal mining company has shut down its coal mine in
\nSangatta since Aug. 2, after the company's striking workers re-
\nestablished a blockade on the company's production facilities
\nfollowing a deadlock in negotiations.<\/p>\n
The strike, which started in mid June, has forced the company
\nto stop operations three times, incurring losses amounting to
\nUS$1.65 million.<\/p>\n
Bambang said KPC's board of commissioners would also attend
\nthe upcoming meeting.<\/p>\n
He said the shareholders had probably made an assessment of
\nevery possible step they could take in response to the mine
\nblockade.<\/p>\n
He said there was a consideration of temporarily laying off
\nseveral staff members while mining operations remained at a
\nstandstill.<\/p>\n
The meeting would also consider declaring force majeure to the
\ncontract of work signed with the government, he said.<\/p>\n
He said that under the force majeure, KPC would be exempted
\nfrom contractual obligations of paying taxes, royalties and other
\nrents to the government.<\/p>\n
\"The force majeure simply means that KPC will not be able to
\npay its full obligation to the government,\" he explained.<\/p>\n
KPC has said earlier that the closure of its coal mine had
\ncost the government Rp 82 billion (US$9.8 million) in potential
\nroyalties and corporate taxes.<\/p>\n
But Bambang said that since no force majeure had been declared
\non the contract with the government, KPC remained liable to fully
\npay its financial obligations to the government.<\/p>\n
Under the force majeure clause of its contract of work,
\nBambang said, the company is allowed to extend the life of its
\ncontract to compensate for the force majeuer period.<\/p>\n
KPC's contract expires in 2022.<\/p>\n
The company declared force majeure for the second time to its
\ncustomers last week following its failure to load arriving ships
\nwith coal due to the blockade by the striking workers.<\/p>\n
The force majeure status prevents the company from being
\ncharged with penalties because of a breach in its sales contract.<\/p>\n
KPC mainly ships its coal to Japan, South Korea and Taiwan,
\nbut it also sends lower volumes of coal to Germany, Italy,
\nPortugal and the United States.<\/p>\n
He said thus far there were no signs as to when negotiations
\nbetween the company and the striking workers could resume.<\/p>\n
He said KPC stood by its condition that it would not begin any
\nnegotiations while the blockade remained.<\/p>\n
\"So it all depends on them (the workers),\" he added.<\/p>\n
The workers have demanded pay hikes and the reinstallment of
\ndaily allowances.<\/p>\n
KPC has agreed to meet the demands but insisted on taking
\ndisciplinary measures on the striking workers. This was flatly
\nrejected by the striking workers. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/shareholders-meeting-to-decide-kpcs-future-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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