Bukit Asam to begin laying off employees

Publicly listed coal mining company PT Tambang Batubara Bukit Asam Tbk will gradually lay off a total of 364 employees beginning later this year, as its Ombilin coal mine operation in West Sumatra would be shut down in 2005, a company top official said.

Bukit Asam president Ismeth Harmaini told reporters on Monday that the company would provide a handsome Rp 30 billion (US$3.37 million) in total compensation for the employees.

"The layoff is unavoidable, due to the closure of the (Ombilin) coal site," he told reporters following a meeting with the House of Representatives Commission VIII on mining and energy.

He said that the layoff program was expected to be completed in 2004.

Bukit Asam is closing down the Ombilin operation as coal reserves in the area has been depleted.

The company, which also controls a huge coal mining site in South Sumatra's Tanjung Enim area, will start a reclamation program at the Ombilin site later this year.

Currently, the company has 4,086 employees posted throughout several mining sites in South and West Sumatra, including Tanjung Enim, Ombilin and Banjarsari.

Several Commission VIII legislators, however, expressed concern over the planned layoff, as it could potentially create social unrest in the areas, particularly with the upcoming 2004 general elections.

Legislators urged Bukit Asam to try to transfer as many workers as possible from the Ombilin site to other coal mining sites.

The government controls 83.74 percent of Bukit Asam, while the remaining shares are held by public investors.

The company sold 9.57 million tons of coal last year, posting a net profit of Rp 177.95 billion. (*)