KPC resumes coal production after workers end strike

KPC resumes coal production after workers end strike

JAKARTA (Dow Jones): PT Kaltim Prima Coal (KPC) has resumed
coal shipments after striking workers agreed to lift a siege that
had disrupted operations at the foreign-owned mine in East
Kalimantan since June 20, President Director Grant Thorne said
here on Monday.

The miner has lifted a force majeure declared last week to
international buyers, although the strikers continue to press
their demands, he added.

Kaltim Prima refused their claim for higher pay and other
benefits after an independent tribunal rejected the workers'
demands.

"The blockade was lifted Saturday, allowing operations to
resume," Thorne said.

Thorne said Kaltim Prima plans to hold discussions with around
250 striking workers on Tuesday to resolve the dispute at the
mine in Sangatta, East Kalimantan.

The striking workers had blocked the road to the company's
coal-processing plant and gasoline-filling station and also
threatened violence against other employees, company officials
say.

Vessels began loading Sunday after the blockade was lifted,
prompting Kaltim Prima to lift the force majeure on coal that had
been in place since July 4.

Kaltim Prima is jointly owned by the Anglo-Australian mining
company Rio Tinto PLC and BP Amoco PLC.

Kaltim Prima is Indonesia's largest coal producer with an
annual output above 15 million metric tons of coal. It ships
around 50,000 tons of coal daily to mostly East Asian buyers led
by Japan. Europe and the U.S. account for a combined 21% of
sales.

The siege and subsequent suspension of shipments has
reinforced concerns among foreign resource companies over the
breakdown of law and order in Indonesia, in particular in
outlying islands where the bulk of the country's resource
industries are located.

Mining companies in Indonesia are facing a mounting wave of
worker unrest over claims of unfair past treatment, particularly
over land compensation.

In the past, Indonesian authorities relied on military and
police units to quell worker protests, but analysts say security
forces increasingly are reluctant to become embroiled in violent
disputes, in part because of greater scrutiny of their actions by
emboldened human-rights activists.

The central government's loosening grip, as Indonesia prepares
to implement far-reaching new laws on regional autonomy from
2001, is also blamed for a rash of mine disputes in recent
months.

A separate siege by local activists at a gold mine in East
Kalimantan operated by a Rio Tinto unit halted operations in
April. Although the siege has since ended, the company has yet to
reach agreement on land rights claims with protesters.