Bukit Asam, Kereta Api deal on coal transportation 130.1mt

Photo by PTBA

JAKARTA (TheInsiderStories) – State coal miner PT Bukit Asam Tbk (IDX: PTBA) and state railway operator PT Kereta Api Indonesia (KAI) signed an agreement for coal transportation at 130.1 million tonnes (mt) of volume during 2017-2021 period, said the company in press statement.
The coal is sourced from PTBA’s coal mining in Tanjung Enim, South Sumatera, and will be transported to Tarahan port in Bandar Lampung and to Kertapati harbor in Palembang.

In 2016, coal transportation by KAI for PTBA reached 17.7 million tons, of which 14.7 million tons was headed to Tarahan port and 3 million tons was transported to Kertapati harbor.
Along with the significant planned production growth, PTBA needs to boost coal transportation through KAI for serving its long term supply contract which now reaches 574 million tons for domestic customers.

PTBA targets to hold 40 percent coal market in the country. Currently, it only contributes 5% of national coal production.
The company has planned to gradually acquire some coal assets in the country for boosting its coal production. For this year, PTBA targets coal sales volume of 20.75 million tons, of which 15.93 million tons will serve domestic demand.

While, coal production in this year has been revised from 25 million tons to a maximum of 32.5 million tons.


Ministry of Energy and Mineral Resources (MEMR) hoist the coal production target this year, which was originally 413 million tons to 470 million tons, an increase of 13.8 percent compared to last year.

According to Bambang Gatot Ariyono, the Director General of Mineral and Coal Mining for MEMR, the revision is in line with the results of the evaluation work plan and budget (RKAB) proposed coal miners.

Based on the National Development Planning Agency (Bappenas) plan, in the medium-term national development plan (RPJMN), coal production target this year is still at number 413 million tons.

Commenting on the revision, Deputy Executive Director of the Indonesian Coal Mining Association Hendra Sinadia rated, an increase in coal production target is appropriate count. Because, the realization of coal production before, never fit into the plan are set each year.

He adding, higher production plan shows the optimism of coal mines entrepreneurs. This condition is reflected in the price of coal began to crawl up from the lowest price level in the middle of last year.

Hendra explained, the realization of the national coal production 434 million tons, up 3.5 percent than the target of 419 million tonnes in 2016.

In the near future, the MEMR will issue rules related to coal downstream. Especially in the development of underground coal gasification for the needs of power plants and fertilizer plants. The Minister Ignasius Jonan has ordered the Head of SKK Migas to accelerated technical management of coal gasification to implement this program.

Thus, the ESDM ministry will issue the ministerial decree to realize the development of this coal gasification which accommodate the owner of the Mining Business License (IUP) can cooperate with other parties for the development of this coal downstream and can manage their own as long as they have technology, environmental management and economic safety.

Coal downstream through gasification is claimed as one of the government’s efforts to increase the added value of the black through clean energy. This plan is also considered to be more environmentally friendly and slightly off the coal emissions compared to Steam Power Plant.

Data from the Ministry of ESDM stated that coal gasification potential reached 40.5 billion tons. When converted to natural gas equivalent to 158 trillion standard cubic feet of natural gas. It exists in South Sumatra, Kutai Kartanegara, Barito, Tarakan, Pasir and Ombilin.

Corporate Secretary of PTBA Adib Ubaidillah claims to have also made a memorandum of understanding (MoU) with Bandung Institute of Technology (ITB) for the development of coal gasification technology, with PT Pupuk Sriwijaya for this downstream and LIPI.

(Written by Linda Silaen, email: linda.silaen@theinsiderstories.com)