Having received approval during a shareholders meeting Thursday night, publicly listed state coal mining company PT Tambang Batubara is set to begin upgrading its coal transportation systems.
PTBA will establish a joint venture with state railway company PT Kereta Api Indonesia (KAI) to upgrade a coal transportation system in Sumatra this year.
The coal transportation system consists of two railway tracks: From Tanjung Enim coal mine in South Sumatra to Tarahan Port in Bandar Lampung, and the second from Tanjung Enim to Kertapati pier in Palembang.
PTBA president director Sukrisno told reporters after a shareholders meeting the upgrade was intended to gradually increase coal carrying capacity on railway tracks from eight million tons per year to 20 million tons within five years.
The total investment for the upgrade, he said, could reach up to Rp 6.39 trillion (US$686 million), with 70 percent coming from loans and the rest from the two companies' internal cash flows, of which PTBA would be responsible for up to 30 percent.
PTBA will also team up with PT Transpacific Railway Infrastructure (TRI) and China Railway Engineering Corporation (CREC) to develop another railway track connecting Tanjung Enim to Tarahan port.
"The new railway track is expected to be ready for use in 2013," Sukrisno said.
The development of the railway track is estimated to absorb $1.06 billion, of which 70 percent, or $743 million, will be financed through loans and the rest generated from the companies: with PTBA contributing 10 percent, TRI 80 percent and CREC 10 percent.
With TRI, the company also plans to establish a joint venture, to be called PT Mining, to develop a coal mine in Bangko Tengah, South Sumatra, which may require a total investment of $19.19 million, 70 percent of which would come from loans.
The company expects the mine to produce 5 million tons in the first year, 10 million tons in the second and 20 million in the third.
Among the company's other plans this year, Sukrisno said, had been the acquisition of a 100 percent stake in state-owned coal shipping company PT Pelayaran Bahtera Adhiguna. The plan, however, was rejected by the majority of the shareholders.
"We only got a 48 percent vote of approval from the shareholders for this acquisition plan," Sukrisno said, adding that a minimum 50 percent was required.
PTBA aims to boost sales volume by 20 percent to 13 million tons in 2008, with 60 percent allocated for domestic consumption.
With the increased sales volume, PTBA is targeting to increase its net profit by more than 20 percent from Rp 760 billion in 2007.
"For this year, we're optimistic to get a profit of more than Rp 1 trillion," Sukrismo said.
In the first quarter of this year, PTBA booked a 29 percent increase in sales income to Rp 1.23 trillion, causing its net profit to grow 44 percent to Rp 286.39 billion due to increases in prices and demands. (rff)
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