Jakarta – Members of the Indonesian Workers Prosperity Union (SBSI) yesterday continued their blockade of a coal mining company's site in East Kalimantan. Officials at PT Kaltim Prima Coal (KPC) said the industrial dispute at the Sangatta site had entered its 10th day.

KPC President Director Grant Thorne hinted in a press release yesterday that if the blockade continues for much longer, the company may be forced to withdraw East Kalimantan.

"Shareholders from London and our Indonesian commissioners meet early next week. If the operation is still closed at that time, we expect they will be forced to make hard decisions." KPC has been unable to supply its clients with coal since August 7 when stocks at the company's port were exhausted. A force majeure was declared on sales contracts on that day to minimize the cost to KPC of its failure to meet its sales' commitments.

"With blockaders having taken control of most of the mining equipment, we are unable to offer productive work to many of our employees," said Thorne. Since the SBSI commenced its strike and blockade on June 14, KPC has lost production of 1.85 million tons of coal with a sales value of US$50 million.

"This is a tragedy for the company, the government, and the community. The loss to the Indonesian government in royalties and corporate tax alone amounts to Rp92 billion [US$10.9 million]," said Thorne.

KPC has lost sales to foreign competitors and fears that Indonesian producers in the future will generally face tougher negotiations with potential buyers. "It is easy to cast Indonesia as an unreliable supplier.

Customers understand occasional strikes but they can tell the difference between a strike and a blockade." It is the complete absence of law enforcement that bothers them most. They prefer to buy where the law provides certainty to business operations," said Thorne.