KEM threatens to declare force majeure

The management of gold mining company PT Kelian Equatorial Mining (PT KEM), unit of Ango-Australian mining giant Rio Tinto, has threatened to declare a force majeure following a blockade around 250 villagers at its mining site in West Kutai in East Kalimantan, the Bisnis Indonesia newspaper reported in its Tuesday edition.

The blockade, which began on last Tuesday, has put the company and its staff in a critical situation. The incident has cut the supplies of food and logistics to the company.

?With in two days, we will try to solve this problem. If not, we will be forced to declare force majeure,? PT KEM president director Arif Siregar said on Monday after attending a ceremony to break the fast in Jakarta.

Arief said if his company fails to end the blockade with in two days, KEM would evacuate its staff and stop production.

PT KEM, which is now in the process of closing its gold mining activities due to the depletion of the gold deposit, said that all the compensation related to the use of the villagers' property and others had been paid in 1988 before the company began its production. (*)