Arutmin halts production as fuel tankers detained

Arutmin halts production as fuel tankers detained

The Jakarta Post
Jakarta

With the Indonesian Navy still detaining three of its tankers,
coal mining firm PT Arutmin Indonesia suspended all operations at
its Senakin mine in South Kalimantan on Monday due to a lack of
fuel.

The company said in a press statement on Tuesday that it was
also considering suspending operations at its other mine in Satui
starting Wednesday, as its current fuel stocks would not be
enough to support mining there either.

Arutmin said the suspension of its operations would result in
potential losses of billions of rupiah per day for the company,
and leave it open to penalties from its customers as it would be
unable to meet its coal shipment schedules.

"Besides financial losses, Arutmin could also lose the trust
of its customers," the firm's public relations officer, Zainuddin
JR Lubis, said in the statement.

Arutmin is the country's third largest coal producer, with an
output of 50,000 tons of coal per day from its three mines in
South Kalimantan. The company was publicly listed PT Bumi
Resources from Australian mining company BHP Billiton in 2001.

Arutmin's total production stood at 15.5 million tons in 2004,
and had been forecast to increase to 18.6 million tons this year.
Most of its production is exported to Japan, the European
countries, South Korea and Hong Kong.

The seizure of the firm's fuel tankers took place on June 16
when the three ships were stopped by an Indonesian Navy patrol
vessel, alleging for illegally transporting 4,100 kiloliters of
fuel without proper delivery order (DO) documents. Arutmin
usually receives 11,700 kiloliters of fuel each month from
Pertamina's Balikpapan oil refinery in East Kalimantan.

Arutmin claims that the shipments were authorized by
Certificate Quantity of Loading (CQL) documents issued by
Pertamina, pending the issuance of the DOs -- a process that
usually takes four days. Even after Arutmin presented the DOs on
June 18, the Indonesian Navy refuse to release the ships.

Commenting on the case, Navy spokesman Commodore Abdul Malik
Yusuf said the tankers had not been released as their shipping
documents were still being investigated and processed.

"Even if they did present the DOs, there are still other
documents that we need to verify first," he said, without giving
any timeframe for the release of the tankers.