Prima Coal to raise its production

JAKARTA (JP): PT Kaltim Prima Coal, jointly owned by the British Petroleum Company and CRA Limited of Australia, will increase its annual coal production to 22 million tons in 1998.

"We'll be expanding gradually. This year, we plan to produce 11.5 million tons, next year 15 million tons and in 1998, 22 million tons," said Keith Gregory, a director of the foreign mining company in Tenggarong, East Kalimantan yesterday.

Kaltim Prima Coal produced 10.1 million tons in 1995.

The company, which started commercial production in 1992, operates a major coal mine in East Kalimantan and is licensed by the government to operate in the area for 30 years.

PT Tambang Batubara Bukit Asam, a state-owned company assigned by the government to control coal mining in Indonesia, requires that Kaltim Prima Coal divest at least 15 percent of its equity to local investors this year.

According to Gregory, the company, which at present operates only one mine in the area, will expand operations to include Kutai district, East Kalimantan, said to have a proven coal reserve of 550 million tons.

"Coal mining has bright future prospects as the world witnesses an increase in the use of coal in industries," Gregory was quoted by Antara as saying in Tenggarong.

He did not mention the amount of investment needed for the expansion or how his company will obtain it.

He said that the coal output of Kaltim Prima Coal is wholly exported to Hong Kong, Japan, Taiwan, the United States and European countries.

Last year, Kaltim Prima Coal exported 10.07 million tons of coal worth US$342.25 million, 28.6 percent of which went to Japan, 28 percent to Taiwan, 17.7 percent to European countries, 9.6 percent to Hong Kong, 9.2 percent to the United States and the rest to other members of the Association of Southeast Asian Nations (ASEAN), which groups Indonesia, Brunei, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The company's production is approximately one-fourth of Indonesia's total coal output, while its exports contribute to about a half of the country's total coal exports. The remaining half comes from several other companies.

Indonesia, which is estimated to have total proven coal reserves of 36 billion tons, produced 40.9 million tons of coal last year. (13)