Kimco threatens to pull out from East Kalimantan

PT Kimco Armindo, which operates a coal mine in Kutai Kartanegera (Kukar) regency, East Kalimantan, has threatened to pull out from the province due to continuing conflicts with local residents, Kaltim Post reported Saturday.

Farid Ikhsan, senior executive of the Korean company, said in Tangarong, the capital of the Kukar regency, on Friday that Kimco might quit its mining activities and leave the province if the conflicts continued.

According to Farid, the local residents continued to harass the company by blocking the road leading to its mining site although the company had surrendered the disputed mining area to the local people.

Due to the people's blockade, the company had suffered a financial loss of Rp 300 billion in the form of penalty from its American buyer, Palmco. "The loss does not include about Rp 3.99 billion the company had to pay for land clearance," he said following a meeting with the local legislators.

Farid said that the company was given a penalty for its failure to meet export commitment to the American buyer. He said that the company could not ship enough coal to the buyer because the road from its coal mining site to the coal terminal was blocked by the residents.

During a meeting, Kimco's general manager said that the Korean company which had invested about US$6 million in its mining site had decided to settle the difference in the local court before making any decision to quit its activities. (*)