Arutmin delays $45m plan

JAKARTA (JP): Coal producer PT Arutmin Indonesia said on Monday it would postpone and possibly cancel its US$45 million investment plan in mining operations due to the unclear status of a coal purchase agreement with state electricity company PT PLN.

Arutmin's senior manager Noet Sutejo said the firm planned to invest $45 million in its Asam-asam coal mine, located in South Kalimantan, following a 1993 memorandum of understanding to supply PLN's Asam-asam power plant with its coal.

According to the agreement with PLN, Noet said, Arutmin would supply PLN with up to 1.6 million tons of coal per year, for a period of 30 years at $0.9 per Gigajoules.

"The status of the deal has become unclear following a presidential decree in 1996, stipulating that all projects from state enterprises must be awarded through a tender process," Noet was quoted by Antara news agency as saying.

PLN conducted a tender for coal supplies for its Asam-asam power plant, which was funded by the World Bank. The winner was coal producer PT Jorong Barutama Greston. (03)