KPC will not be able to meet 2003 output target: CEO
Wednesday, October 1 2003 - 05:00 AM WIB
He told Petromindo.com on the sidelines of an international mining conference in Jakarta on Wednesday that because of this problem the company would be unable to meet this year?s 18 million tons production target.
?The production target now seems to be difficult to achieve,? he said, adding that rainy season in the fourth quarter of this year would make efforts to boost output during the quarter more difficult.
KPC workers began their strike on August 29 demanding the company?s shareholders, Rio Tinto and BP Plc, to provide a bonus from the sale of their entire stake to PT Bumi Resources. The strike had forced the company to halt production activities.
The strike ended on September 21 after East Kutai Regent Mahyuddin promised to help in negotiation with the KPC management. KPC shareholders had agreed to provide a goodwill bonus of US$6 million, but the workers protested the arrangement particularly as the bonus will still have to be deducted by income tax.
KPC is a giant coal producer with mining operation in East Kutai.
Elsewhere, Noke acknowledged that KPC management and workers union have yet to reach a final agreement on the payment of the $6 million funds, saying the company remains with its position that the amount of the bonus was final.
He explained that KPC was still waiting for confirmation from the Directorate General of Taxation whether the bonus payment will still be subject to tax
Meanwhile, an analyst said that this lingering problem makes the situation at KPC still ?uncertain? as workers could resume their strike any time, which may create another threat to production.(Alex)