Bukit Asam's boss defends separation of Ombilin unit

R. Sunardi, the president of PT Bukit Asam again defended the separation of the state owned coal mining company with its production unit in Ombilin in West Sumatera, saying the split is only administrative not a spin-off or a divestment as many feared, Bisnis Indonesia reported on Friday.

Sunardi said in Padang on Thursday that the Ombilin unit is still administratively linked with PT Bukit Asam although it has no longer become an integral part of the daily operation of Bukit Asam, which now focuses its operation on its coal concessions in Tanjung Enim, South Sumatera.

According to him, the separation of the Ombilin unit was necessarfy to bring a clear picture to investors about the actual activities of PT Bukit Asam, which will soon launch its privatization program.

He said that after the separation, the Ombilin coal mining unit would be managed by a different management team and he assured that the split was only administrative. But he did not clearly define what he meant by an "administrative separation."

The local people have expressed dissatisfaction over PT Bukit Asam's decision to separate the Ombilin unit from its operation.

Sunardi said that the Ombilin unit's open mining area still contains coal deposit of about two millions tons but he feared that the coal reserves will deplete earlier than 2003 as estimated due to rampant illegal mining activities in the area.

He acknowledged that the underground coal reserves could reach over 67 million tons but opening up the underground reserves was still too costly.

In 1995 Bukti Asam launched an international tender to develop the mining site but no realization had so far been made because a Chinese company, which won the tender, delayed the development of the project due to crisis. (*)