Samarinda tense after rallies against coal mining

Samarinda tense after rallies against coal mining

The Jakarta Post, Samarinda

The situation in the East Kalimantan cities of Samarinda,
Balikpapan and Sangatta remained tense on Thursday following the
provincial legislative council's decision to temporarily halt the
operations of coal mining company PT Kaltim Prima Coal.

Thousands of locals staged demonstrations in the three cities
and at the company's main office in Kutai Timur, demanding that
KPC and the central government sell its 51 percent shares to the
province.

A number of youth organizations and local non-governmental
organizations joined the demonstrations to press the provincial
administration and the Kutai Timur regency to support the
provincial legislature's decision.

They also rejected the central government's recent decision to
give only 31 percent of the company shares to the province and to
retain the remaining 20 percent while mining group Rio Tinto and
energy giant BP Plc. would retain their 49 percent shares.

Around 80 youths blocked the check point leading to the
company managers and superintendents' housing compound in
Tanjungbara in an attempt to prevent them from going to work.

The company's workers were later free to enter and leave the
housing compound following the deployment of around 200 security
personnel to enhance security around the mine.

A number of youths entering the mining location to meet the
company's executives were expelled by force by security
personnel.

The provincial legislature which held a plenary session to
discuss KPC's divestment decided that KPC must temporarily stop
its operation until the divestment issue was resolved.

The decision was made in response to the central government's
recent decision to give only 31 percent, instead of the requested
51 percent, of the government's shares in the mining company to
the province.

According to the production-sharing contract, the central
government has 51 percent of the company's shares, but in view of
regional autonomy, the provincial legislature claims that the
central government's shares in the company should belong to the
province since the mine is located in the province.

"We reject the central government's unilateral decision on the
company's divestment and, therefore, we decide the company should
offer the 51 percent shares to the province," Kasiful Anwar,
chairman of the provincial legislative council, said.

The legislature also called on the local people and the
provincial administration to support their decision.

The legislature also accused Minister of Mines and Energy
Purnomo Yusgiantore, representing the central government in this
matter, of conspiring with KPC.

"Honestly, the central government's decision is not fair
because it benefits only Rio Tinto the holder of 49 percent of
the company's shares.

"We are surprised that the central government which declined
to purchase KPC's shares four years ago are interested in
dominating the company's shares," he said.

The Salim Group is trying to enter the coal business by
supporting the province's fight for a bigger part of KPC shares.

The value of the government KPC shares is equivalent to US$419
million.