Rio Tinto to stay in Indonesia
Friday, July 7 2000 - 03:30 AM WIB
Mining giant PT Rio Tinto Indonesia will not back off from Indonesia despite a major dispute between coal subsidiary PT Kaltim Prima Coal (KPC) with its employees which have forced KPC to declare a force majeure.
Rio Tinto Indonesia president Noke Kiroyan stressed that the mining group would continue to invest in Indonesia.
Kiroyan told reporters following a hearing session with the House of Representatives commission VIII on mining and energy that the ongoing dispute between KPC and a group of employees was merely a part of the overall process of the country to transform itself into a democratic nation from a long-oppressed society.
He was quoted as saying by the Bisnis Indonesia daily that the current trouble was part of the learning cost of democracy.
"So we're optimistic. A mining company must be optimistic because we invest for the long term," he said.
Kiroyan said that he had informed Rio Tinto's headquarters in London about this problem, which is part of the country's learning process to become a democratic nation.
Rio Tinto Indonesia has a 50 percent stake in KPC, 90 percent stake in gold mining firm PT Kelian Equatorial Mining (KEM), and ownership in gold giant PT Freeport Indonesia.
Kiroyan, however, added that Rio Tinto might consider pulling it self out of the country if the KPC problem dragged on, and causing the company to be unable to make production for months.
Some 150 employees of KPC have staged a demonstration since June 14 demanding, among other things, a raise in salaries. The protesting employees is backed by the SBSI labor union. The company has so far declined to fulfill the demands.
The protesting employees have also controlled certain vital production facilities causing the company to be unable to run production. This has in turn caused the company to be unable to deliver products to its foreign buyers according to the agreed contract.
In a bid to avoid penalty, KPC declared a force majeure status on Tuesday.
Kiroyan admitted that the force majeure status would affect foreign confidence in the country's mining sector. (*)