Indonesia coal producers still reliable suppliers: Executive

Despite economic turmoil and political stability that hit Indonesia since the past few years, Indonesian coal producers are still considered reliable suppliers, according to a top executive of a major Indonesian coal company.

?Contrary to the beliefs that Indonesia is no longer a reliable source of supply because of the security concern, evidence had shown the contrary,? said Jeffrey Mulyono, the president of East Kalimantan based coal mining firm PT. Berau Coal and secretary general of Indonesian Coal Mining Association in a conference organized by Coaltrans in Bali.

Jeffrey said the era of regional autonomy and democratization in Indonesia had caused concern among coal producers and buyers alike because it has no clear directive from central government and often causing local governments to unilaterally enacting regulations and levies that are not in line with the coal contract of works.

?It is true the good old days when every problems could be duly taken care of by central government are over. Now coal producers have to deal directly with local governments and local communities which in many cases do not have adequate know-how about mining operations. In the good old days, every dispute with local communities or labor strike could easily be suppressed by government. Now it?s not that easy,? said Jeffrey.

Jeffrey said the emergence of labor union which often push for their demands by disrupting production and the emergence of NGO?s had caused more headaches to coal producers. Jeffrey identified that after the implementation of regional autonomy in early 2001, there are three main factors that are potential in disrupting production process; employees strike, contractors? employees strike and conflicts with local people.

However, despite the facts, said Jeffrey, empirical evidence had shown that Indonesian coal producers are consistently increasing their production.

?Production has increased significantly from 82.5 million tons in 2000 to 92 million tons in 2001, and the trend will keep increasing in 2002. That means there?s still strong confidence among producers and buyers,? he said.

?Disruption has occurred, workers did strike, force majeurs had been declared, but eventually most of the disruption were eventually settled. Besides that kind of thing also happen from time to time in another countries. So, as far as security of supply is concerned, Indonesia is still a reliable source of coal supply,? he said.

In the past major coal producers such as Kaltim Prima Coal, Adaro Indonesia and several other had been hit by labor strikes that temporarily causing production to sharply decline.

He urged that coal mining companies in Indonesia must work hard to avoid future disruption by actively seeking support from local authorities by directly involved in development programs and community development and companies must also make sure that their employees and contractors? employees are well paid and satisfied. (alex)