Strike hits BP's coal mine sale

ATTEMPTS by energy giant BP to sell its last coal asset have been disrupted by a strike at its vast mine in Indonesia, with workers disputing their share of the sale proceeds.

BP, which holds 50% of Kaltim Prima Coal on the island of Borneo, agreed in July to sell the mine to an Indonesian group for $500m (£316m) in cash and assumed debt.

Rio Tinto, which holds the other 50% of Kaltim Prima Coal, also agreed to the deal, which is scheduled to close next month.

BP and Rio said that they had offered each of the mine's 2,700 workers 2m rupiah (£152) per year of service as a 'voluntary goodwill payment'.

The move came despite the fact that the workers do not own a share of Kaltim Prima Coal and will continue to be employed by its new owners, Bumi Resources.

However, the workers are asking for 14m rupiah per year of service, a demand dismissed by BP as 'unreasonable'.

With the two sides deadlocked, workers walked off the job last Friday halting the mine's two million tonnes-a-month production.

BP officials in Jakarta and London said they now want the dispute to go to arbitration, a suggestion they say the workers have rejected. Union representatives were not available for comment.

BP maintained that the deal would still be completed next month.