Berau ready to supply new coal-fired power plant

Coal producer PT Berau Coal says it is ready to supply up to 100,000 tons of coal a year to a 14-megawatt power plant to be built near its site in Lati, Berau, East Kalimantan.

Berau Coal spokesperson Bintoro Prabowo said on Tuesday that the power plant would be built by the PT Indonesia Pusaka Berau consortium, comprised of PT Pusaka Jaya Baru, which is owned by the Berau administration, and PT Indonesia Power.

Construction would start at the site later this year and the plant would begin operation in 2012, Bintoro said.

“The exact amount of coal we’ll supply to the planned power plant and the price will be discussed further with the consortium,” Bintoro told reporters during a media visit to the company’s Binungan mine in Berau.

Bintoro said the new plant would supplement an existing 2x7-megawatt power plant at the same location.

The existing plant, which started commercial operation in 2005, was the first mine-mouth power plant in Indonesia, according to Bintoro.

Berau Coal has allocated 100,000 tons of coal to the power plant every year since 2005 as part of its corporate social responsibility program.

The company sells the coal to the plant operator practically for free, only requiring the operator to pay a 13.5 percent of the coal price as a royalty to the government.

However, the existing power plant has not used Berau Coal’s full allotment of coal in recent years.

According to the company, in 2010, the company sent 83,092 tons of coal to the power plant, up slightly from 82,008 tons in 2009 and 76,186 tons in 2008.

Choiruddin Noer, the finance director of PT Indonesia Pusaka Berau, said that construction of the planned power plant would cost around Rp 140 billion (US$16.38 million).

He added that the existing and the planned power plants would need an annual supply of coal of around 200,000 tons.

Berau Coal is the nation’s fifth largest coal producer. Last year, the company produced 17 million tons of coal, up from 14.1 million tons in 2009. This year, it aims to produce 20.3 million.

In the first half of 2011, Berau Coal’s production topped 9 million tons, or 44.3 percent of its target for the year.

China is the company’s main destination for coal exports, accounting for 34 percent of the firm’s total exports in 2010.

Twenty-six percent of the company’s output last year was earmarked for domestic customers to comply with domestic market obligations.

The remaining 40 percent of Berau’s production in 2010 was exported to South Korea (18 percent), India (9 percent), Taiwan (9 percent), Japan (3 percent) and Hong Kong (1 percent).

Berau Coal started businesses in 1983 and currently has a concession that spans 118,400 hectares in Berau.

The company currently operates mining sites at Lati, which started production in 1994, Binungan, which started in 1996, and Sambrata, which started in 2001.

The three sites contain total estimated reserves of 346 million tons of coal as of 2009.