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Bukit Asam to spread wings regionally
State-owned coal miner PT Bukit Asam plans to further penetrate the Asia-Pacific market this year, with a focus on countries that have shown a growing appetite for developing coal-fired power plants
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tate-owned coal miner PT Bukit Asam plans to further penetrate the Asia-Pacific market this year, with a focus on countries that have shown a growing appetite for developing coal-fired power plants.
The company aims to sell 27.29 million tons of coal this year, up by 31 percent compared to last year’s figure. Nearly 60 percent will be sold in the domestic market, while the rest will be allocated for exports. If this happens, Bukit Asam’s export volume will rise by over 30 percent compared to 2016.
Among the top countries on Bukit Asam’s export destination list are China, India, Malaysia, Thailand, Vietnam and the Philippines.
“At present, we’re only supplying a small amount of coal for cement factories in Vietnam. This year, we’ve joined a tender to supply coal for various power plants there,” Bukit Asam corporate secretary Adib Ubaidillah said on Thursday after the company’s annual shareholder’s meeting.
Around 50 percent of the company’s exports this year will be allocated for China and India.
“We want to increase the export volume to those countries due to their rising domestic demand for coal,” Adib said.
The Chinese government previously reduced its mine production days to 276 days from 330 days a year, resulting in a significant hike in its coal imports.
Meanwhile, India, the biggest importer of Indonesian coal, is in dire need of coal following the ongoing construction of numerous coal-fired power plants with a total capacity of 50,025 megawatts (MW) across the nation.
Since 2016, Bukit Asam has produced low-to-medium coal grade with a calorific value of around 4,800 to 5,000 kilocalories per kilogram, which are suitable for India’s power plants.
The company aims to produce 24.07 million tons of coal this year, up 22 percent from last year, to meet its sales target. At the same time, it also plans to buy 3.03 million tons of coal, up 152 percent annually, through its subsidiaries.
Bukit Asam has proven coal reserves of 3.3 billion tons, with 80 percent located in Tanjung Enim and Lahat, both in South Sumatra.
To anticipate increasing coal production, Bukit Asam has formed an agreement with state-owned railway operator KAI to increase the capacity of the latter’s coal freight trains in Sumatra from 14.7 million tons last year to at least 21.7 million tons in 2017.
Last year, Bukit Asam also completed revamping its train loading station at the Banko Barat block in South Sumatra. The upgrade allows the facility to double its capacity, giving it the ability to manage the transport of 12 million tons of coal per year.
The company also said it would soon start the development of a pier facility in Prajen, South Sumatra, to manage the transportation of up to 15 million tons of coal.
“We have cleared the land for the dock. So, hopefully, its development can be completed next year,” Bukit Asam president director Arviyan Arifin said.
Bukit Asam has allocated around Rp 5 trillion (US$375.26 million) in capital expenditure to finance its expansion this year, including to acquire a coal mine or a coal-fired power plant, in line with its plan to be an energy company in the long run.
As of today, the publicly listed company has operated three power plants in South Sumatra with a total capacity of 266 MW. It also has several other ongoing projects with a total capacity of around 5,000 MW.
