KPC?s disputed mining areas reopened

The East Kalimantan police have formally reopened PT Kaltim Prima Coal?s disputed six mining areas in the province?s East Kutai regency, paving the way for the coal mining company to resume its mining activities

Investor Daily reported Wednesday that the local police untied the police line installed at the main gates of the six mining areas on Tuesday to mark the reopening the mining areas.

The reopening of the mining areas was made following a fire which burned the company?s coal reserves in at least 13 locations.

KPC?s chief operating offer R. Utoro said that the fire, which broke when the mining areas were still under the police line, destroyed at least 227,000 tons of the company?s coal reserves.

The newspaper did not explain why the police reopened the mining areas, but early reports said that the local administration of East Kutai regency had agreed to reopen the dispute mining areas following a clearance from the ministry of forestry that the company did not violate any forestry regulation.

Earlier, parent company PT.Bumi Resources estimates to suffer production loss of 74,000 tons per day after the regency administration ordered partial production stoppage at KPC's mines.

The company revealed in an analyst presentation posted at the Indonesian Stock Exchange on Friday that under the worst case scenario, KPC?s Melawan Khayal, Belut and Beruang pits operated by Thiess suffered production loss of 39,000 tons per day (tpd). Pelikan and Macan pits operated by PT.Pama Persada Nusantara suffered 16,000 tpd, while Bengalon coal hauling operated by PT.Darma Henwa suffered 19,000tpd.

The company, however, said that as per August 21, 2008, Bengalon coal hauling has been back into operations. (*)