Churchill Mining, partner defeated in legal battle over coal concession

UK coal mining firm Churchill Mining announced Thursday that the State Administrative Tribunal in Samarinda, East Kalimantan has today ruled against the company and its Indonesian partners, the Ridlatama Group.

Churchill and Ridlatama initiated the Administrative Tribunal in September 2010 in order to have the original cancellations officially expunged from the record, as they considered that the East Kutai regent had violated a number of administrative protocols as in 2010, the regent have cancelled the four mining licenses that comprise the East Kutai Coal Project (EKCP).

The Administrative Tribunal did not, however, agree with Churchill's and Ridlatama's position and ruled that the regent's attempted revocation of the EKCP licenses did not defy any administrative regulations, a decision that Ridlatama and Churchill will appeal to the State Administrative Tribunal. Instead, the Tribunal cited an April 2010 letter from the Ministry of Forestry to the Regent advising the cancellation of Ridlatama and Churchill's licenses after receiving reports from residents that the company had carried out mining activities leading to the damage of forestry areas.

?Churchill strongly protests this decision and emphasizes that the Company and its partners have never done any mining at the EKCP site. Furthermore, Churchill points out that the communities around the EKCP site have never made such a complaint, a claim substantiated by a sworn Ministry of Forestry affidavit from the chief of the local Dayak cultural council that affirmed that local land owners have found the EKCP partners to have never performed any illegal activities and to have acted responsibly at all times. This evidence was presented during the Administrative Tribunal proceedings. Finally, Ridlatama and Churchill note that the licenses that make up the EKCP, which were issued by the same Regent in 27 March 2009, lie outside forestry areas, and therefore are not subject to Ministry of Forestry oversight,? the company said.

?The company strongly disagrees with the decision and is currently evaluating options to remedy the situation, including appeal to the State Administrative Tribunal in Jakarta. At no time during this process has Churchill considered the EKCP licenses cancelled or invalid,? it added.

Under the Indonesian legal system an Administrative Tribunal is supposed to rule strictly on matters of process as to whether bureaucrats, elected officials, and government institutions have observed procedural rules and regulations in making decisions. The proceedings before the Samarinda Administrative Tribunal do not constitute an action that will immediately affect the substantive rights of the owners of the EKCP Licenses and the decision by the Samarinda Administrative Tribunal is not final and binding as a matter of law until after all appeal avenues have been exhausted, it said.

Churchill and its partner has completed feasibility study on EKCP, which has more than 900 million tonnes proven and probable reserves, and is planning to develop the mine to produce 30 million tonnes per year at its peak with investment of more than US$1.5 billion. (alex)