Coal company to develop Tarahan port for exports

JAKARTA (JP): The state-owned coal mining company PT Tambang Batubara Bukit Asam is developing Tarahan in Lampung to become a coal export port to meet the increasing demand for this product.

"The port development will need an investment of Rp 43.13 billion (US$18.7 million) and is scheduled to be completed early next year," the company's president, R.A. Sunardi, said in a statement here over the weekend.

He said that Tarahan currently functions as a port specially for the transportation of coal from Bukit Asam mines in South Sumatra to a steam power plant in Suralaya, West Java.

"The port's storing capacity is now only about six million tons of coal. We'll double the capacity," he said, adding that his company has awarded the development contract to Ballast Nedam Group of the Netherlands and its local partner, the state-owned PT Waskita Karya.

According to Sunardi, the port development will include the construction of a new pier that will be able to accommodate ships of up to 120,000 dead weight tons.

He said that most of the coal his company produces in Bukit Asam is steaming coal, which is seeing increasing demand on the world market.

"This is due to the coal's low content of sulfur, so that it causes no harm to the environment," he said.

Recently, a major study of the world coal trade by Australian Mineral Economics Pty Ltd. concluded that the annual demand for internationally traded steaming coal is forecast to jump by 70 percent to 395 million tons in 2005 from 1995's level.

The company bases its steaming coal demand forecast primarily on Southeast Asian power needs, which are created by strong economic growth.

Sunardi pointed out that the southern part of Sumatra will face no problem in coal reserves because it contains 18 billion tons of coal, or about 60 percent of Indonesia's total coal reserves.

But, he said, his company's production capacity will have to be raised from the current five million tons to 12 million tons per year so that it can fulfill the growing world market demand, particularly in the Asia Pacific region.

To anticipate the growing demand, Tambang Batubara Bukit Asam planned in March to build a coal upgrading facility at its mining area in South Sumatra.

The company said that the upgrading will improve low-quality coal to make it fit for various consumer purposes and exports. (13)