Bukit Asam to raise its coal production

JAKARTA (JP): PT Bukit Asam, the state-owned coal mining company, will spend about Rp 70 billion (US$29.2 million) to boost its coal production from 9.07 million tons to 12.5 million tons a year, a company executive said.

Production director Tommy Isnutomo said yesterday the expansion would start next month.

He said production would be increased in two stages and the firm would be able to produce 11.42 million tons by the end of the year.

Tommy did not say when the company would start producing 12.5 million tons a year at its mining concession in the South Sumatra city of Tanjung Enim. It has a coal deposit of more than 5.5 billion tons.

Due to an encouraging market outlook many local and foreign investors wanted to help finance the expansion project, he said.

"But we'll do it alone by securing a loan from the state-owned Bank Dagang Negara," he said in Bandar Lampung, reported Antara. He did not give details of the loan.

He said PT Bukit Asam would continue to explore in South Sumatra. The area is believed to be rich in coal.

R.A. Sunardi, PT Bukit Asam's president, said his company would increase its sales on local and global markets.

On the domestic market, the company annually sells more than one million tons of coal to cement industries, about one million tons to South Sumatra's coal-fired Bukit Asam power plant and more than five million tons to West Java's coal-fired Suralaya power plant.

The company's exports are 2.5 million tons a year to four Asian countries -- Japan, Malaysia, Taiwan and the Philippines.

On May 2, the firm won a new contract to export coal to the Philippine National Oil Coal Corporation Company.

It would be exported in increasing amounts, he said. In the first few years, Bukit Asam will export 120,000 tons. It will increase to 250,000 tons a year and finally 850,000 tons by the year 2002.

He said his company had secured two contracts to supply coal to two big Japanese companies -- Mitsubishi Oil and Nisso Iwai -- this year.

"Other companies from Thailand, the Philippines and Taiwan are interested in buying our coal," he said.

Tommy said that to facilitate exports the company was building a coal port in Tanjung Api-api, South Sumatra, with a capacity of 20 million tons a year.

He said the port would be bigger than Lampung's Tarahan port which had a capacity of 12 million tons.

He said the company, which lost Rp 7 billion recently in a fire at its conveyor belt at Tarahan's port, would also build a 70-kilometer railway from Kertapati to Tanjung Api-api port. (bnt)