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tate coal mining firm PT Bukit Asam (PTBA) struck a deal with Malaysian electricity utility firm Tenaga Nasional Berhad (TNB) and Indonesia’s PT Perusahaan Listrik Negara (PLN) to develop mining sites in Riau.

The companies have agreed to form three joint ventures, comprising a firm that will work on the development of PTBA’s mining sites in Peranap, Indragiri Hulu.

The other two ventures will manage construction of mine mouth coal steamed power plant (PLTU) with a capacity of 2x600 megawatts, and develop a 275 kV interconnection line from Telok Gong in Melaka to Garuda Sakti in Sumatra.

Under the agreement, PTBA will have 51 percent in the mining site development venture, 25 percent in the power plant company and 10 percent in the interconnection line business, PTBA corporate secretary Hananto Budi Laksono said on Saturday.

TNB and PLN will own the remaining stake in the joint ventures.

The companies are now working on feasibility studies on the development of the three projects.

“Parties will start exploring and studying the best business models, associated risks and financing options to ensure that the contemplated projects can be successfully implemented,” TNB, which is listed on the Malaysia stock exchange, said in a written statement.

The feasibility studies on the power plant and interconnection line developments will require about one year, according to Hananto of PTBA.

“The amount of investment needed will be clear after the feasibility studies are done,” Hananto told The Jakarta Post.

For the power plant development alone, as much as US$1.6 billion investment would be needed, he added. That is based on PTBA’’s PLTU project of 2x620 megawatts plant in Banko Tengah, South Sumatra.

PTBA has just begun the production activities at its Peranap coal mining site, marked on initial delivery to India last April.

The Peranap site, which has coal resources of 792 million metric tons and mineable reserves of 367 million metric tons, is expected to produce about 100,000 million metric tons by year end.

Peranap is expected to increase its production gradually over the next years to reach 2.5 million metric tons by 2016.

The site would be able to support the planned mine-mouth power plant, which would need 5 to 6 million metric tons of coal per year when the plant begins full operation.

Electricity produced by Peranap mine-mouth plant will be delivered within Indonesia and to Malaysia through an undersea transmission line.

Peranap produces low calorie coal, which is suitable for mine-mouth power plants. PTBA is also planning to increase the value of Peranap’s coal through coal upgrading technology. The firm is conducting studies to improve existing river transportation to ease distribution from Peranap.

The joint ventures are expected to support development plans for Peranap, whose coal production is expected to support PTBA’s total production target of 50 million metric tons of coal in 2016.

PTBA is aiming to sell 18.66 million metric tons coal by the end of 2012, up 38 percent from last year’s 13.5 million metric tons.