Coal miner KPC ups output as workers ease pressure

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)