PTBA to boost coal output next year

PTBA to boost coal output next year

The Jakarta Post, Jakarta

State coal mining firm PT Tambang Batubara Bukit Asam (PTBA)
expects a significant boost in its coal output starting in 2005,
pending the successful acquisition of several coal mining firms.

PTBA president Ismet Harmaini said that while the firm was
eyeing a number of potential companies to be acquired, it was
currently finalizing the acquisition of a coal mining firm in
Kalimantan.

That deal alone, scheduled for completion early in 2005, could
boost PTBA's coal output by about 20 percent, he said in his
presentation paper at an energy conference on Tuesday.

"It would immediately provide an additional production output
of about 20 percent," Ismet said, without mentioning the targeted
company.

The publicly listed firm expects to produce 9.9 million tons
of coal this year, lower than the 10.03 million tons produced
last year due in part to problems in the railway transportation
system.

The coal producer, the fifth largest in the country, has said
that the mergers and acquisitions (M&A) scheme was aimed at
boosting output and meeting rising demand, both from the domestic
market or exports.

At present, the company exports more than 1 million tons of
coal per year to Taiwan, Malaysia and Spain.

But, the bulk of its production is for the domestic market. It
supplies about 6.1 million of tons of coal per year to coal-fired
Suralaya power plant, and about 1.2 million to coal-fired Bukit
Asam power plant.

Domestic coal demand for power generation alone would likely
reach about 35 million tons in 2010, as compared to about 22
million tons this year, according to the paper.

Elsewhere, the company also said that it was pushing ahead
with its plans to improve the railway facilities in Sumatra,
scheduled to start next year, to boost existing capacity.

PTBA is faced with problems in delivering about 7 million tons
of coal per year from Tanjung Enim mine in South Sumatra to
Tarahan port, and about 1.5 million tons to Kertapati port. When
completed in 2007, the $200 million program would enable the firm
to jack up the railway capacity to 12.5 million tons per year and
2.5 million tons.

The projects will be conducted jointly with State Railway
Company PT KAI.

Another major project that the company is pushing ahead with
is a plan to build a 2 x 100 megawatt coal-fired power plant with
PT Indonesia Power in Banjarsari, South Sumatra, and another
coal-fired power plant with the same company in Pranap, Riau,
which will have a capacity of 2 x 250 megawatts.

At a combined cost of $709.9 million, Banjarsari and Pranap
power plants are scheduled for commissioning in 2008 and 2009,
respectively.

PTBA has coal resources of about 7.3 billion tons -- or about
17 percent of the country's total coal deposits -- with total
mineable reserves of 1.5 billion tons.