Govt ready to declare KPC under force majeure status

The government will agree to declare coal giant mining company PT Kaltim Prima Coal (KPC) to be under a force majeure status if such action is stipulated in the firm's mining contract with the government, according to director general of mining Surna T. Djajadiningrat.

But Surna was quoted as saying by the Neraca daily on Tuesday that it's better not to declare the force majeure status because such action would affect investor sentiment in the country's overall mining sector.

He appealed the local administration to help KPC resolve its dispute with the protesting group of employees.

Some 150 employees had staged a demonstration for more than a week demanding a better salary. The protesters have controlled certain key facilities causing disruption to the company's coal mining production.

KPC is planning to ask to the government to declare the company under a force majeure status to avoid having to pay a penalty for a failure to deliver coal products to its foreign buyers on time.

Neraca said that according to the verse 21 of KPC mining contract with state-owned coal firm PT Tambang Batubara Bukit Asam, which represents the government, the company can be declared under a force majeure status not only due war, natural disaster or social and political upheavals, but also due to dispute with labor which affect production. (*)