Coal miner KPC ups output as workers ease pressure

JAKARTA (JP): Coal mining firm PT Kaltim Prima Coal said on Wednesday in East Kalimantan that it had raised its coal output to 70 percent of production capacity after striking workers returned some of the heavy mining equipment they had taken over since early February.

KPC's Jakarta representative Bambang Sutanto said that since last week, the mining company was able to raise daily output to 35,000 tons from 25,000 tons.

"We can't operate normally with workers still holding back our shovels," Bambang told reporters at his office.

He is still uncertain when the company would operate at its normal production capacity of 50,000 tons a day.

Fifty workers of KPC's contractor PT Liebherr, which operates the giant mining excavators have been on strike since early February.

In pushing for better wages, Bambang said, the striking workers took control of four of the excavators.

"Between February and late March, our production fell by 50 percent, dropping to 25,000 tons," he said.

He said that last week, Liebherr managed to persuade the workers to return two of the shovels.

Bambang added that with production still running, the company had no plans in the near future to declare force majeure to its buyers.

KPC, located in Sangatta regency, has an annual production rate of 15 million tons of coal.

Last year, a three month strike by KPC's own workers cost the company a production loss of 1.5 million tons, causing it to announce force majeure.

KPC supplies coal under long-term contracts to companies including the Taiwan Power Company, China Light, and Tenaga Nasional Berhad in Malaysia.

Last month, Bambang said, KPC paid demurrage charges of US$1 million to ships that were unable to load coal upon arriving in Sangatta.

"We now have five ships at our harbor waiting to be loaded," he said.

He estimated KPC will have to pay another $1.5 million to $2 million in demurrage charges, if the strike doesn't end by this month.

Bambang said that Liebherr's striking workers were members of the Indonesian Prosperity Trade Union (SBSI). This is the same union that last year organized the strike of KPC's workers.

While KPC cannot discipline Liebherr's workers, the company sought to fire its own workers involved in the strike, he said.

According to him, 10 KPC workers, also members of SBSI, helped Liebherr's striking workers remove the shovels from the mining site.

Bambang said the 10 workers were suspended from work, and KPC now sought permission from the Ministry of Manpower to dismiss them.

He added that KPC had the support of Sangatta's local community in coping with the strike.

"In fact, they (the community) are sick of SBSI, and want to drive it out of East Kalimantan," he said.

A statement by KPC claimed that locals had initiated a petition for the ousting of SBSI and for showing their support of KPC.

It said that SBSI was reported to have insisted on continuing its struggle, and even expressed its readiness to seek new investors if KPC's current shareholders resigned.

KPC is jointly owned by Anglo-Australian mining company Rio Tinto, and British-American oil and gas company Beyond Petroleum (BP), which was formerly known as British Petroleum.(bkm)