Arutmin, employees agree over alliance with Thiess

Coal mining company PT Arutmin Indonesia and its employees finally agreed on Thursday over the amount of severance payment, paving the way for realizing the plans to form an alliance with PT Thiess Contractors Indonesia to develop coal mining project in South Kalimantan.

The Banjarmasin Post daily quoted Arutmin official Adi Tutuko as saying that the amount of the severance payment had been multiplied from the initial offer of Rp 1.5 million per person.

He said that the size varied depending on how many years the employee had worked with the company. He pointed out that an employee with 3-12 months working period would receive a compensation of two-months salary, while those with working period of 10-15 years would receive around 16-month salary.

Arutmin employs nearly 2,000 employees. The company's plans to form an alliance with PT Thiess was blockaded by the employees who demanded Arutmin to provide them with an acceptable amount of compensation or severance payment.

Under the alliance plans, all of Arutmin's employees would be transferred to PT Thiess. But the employees demanded a severance payment for their service at Arutmin because the transfer to PT Thiess would be the same as a layoff from Arutmin.

Adi explained that Arutmin had to form an alliance with PT Thiess as a strategic move to survive the current environment in the coal industry which is being flooded with more coal products from the mushrooming of new coal companies in Russia, China, and India as well as from illegal miners at home.

He said that on the other side, demands for coal remained weak amid the current economic crisis in the region.

He said that this condition has caused prices to drop to its lowest level in the past decade, and he expected the price to remain low over the following years.(*)