Arutmin stops 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 is owned by publicly listed mining firm PT Bumi Resources, and was acquired 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, 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 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 time frame for the release of the tankers.