KPC workers stop blockade

KPC announced today that the striking employees who had taken control of most of the Company's mining fleet and coal transfer system on 2nd August, left their blockade positions at about 8am this morning.

A formal agreement on the return to work has yet to be signed, but KPC is cautiously optimistic that a lasting return to normal operations can be achieved within the next three or four days.

Since this dispute involving members of the SBSI labour union began on 14th June, KPC has twice been forced to declare Force Majeure on its Sales Contracts. Alternative cargoes for customers have been arranged either from Australian producers or other operations within Indonesia. President Director Grant Thorne said "We will build a modest stock of coal at our port site before moving to lift our declaration of Force Majeure. We don't want to divert vessels from their new destinations, only to frustrate them again."

KPC has lost 2.2 million tonnes of coal conveyed during the blockades, with a sales value of US $58 million. The loss to the Indonesian Government in Royalty and Corporate tax alone amounts to Rupiah 110 Billion.

In a statement to employees which outlines the Company's position, Dr. Thorne observes "This dispute has damaged the community, the company, the workforce and the nation; however, all parties have committed to follow Regulation in future and, if they are as good as their word, the circumstances of the past two months should never happen again".

For further information, please contact:

Bambang Susanto, General Manager - External Relations Phone: (021) 527 4208, Fax: (021) 527 4228 - 29 (--press release from KPC --)