Bukit Asam to Set Aside $1.5B to Build Power Plants in 2018

Krakatau Steel has conducted its first production of hot rolled coil steel from the results of its newest steel smelting plant, Blast Furnace. HRC produced at the Hot Strip Mill facility is free good or prime quality, so it meets commercial steel specifications. Five steel slabs were successfully rolled on this HSM with a thickness of 4mm and a width of 1200mm and a length of 11,600 mm. The total weight is 22.9 tons for each HRC. Previously, the product from Blast Furnace in the form of hot metal or liquid steel was brought to the Company's steel slab plant for casting (casting) into steel slab. This Steel Slab Plant also has a role in regulating the chemical composition of a steel product so that it meets the qualifications for the use of certain desired steel. "By using liquid steel input from Blast Furnace, we were able to reduce the consumption of electricity and electrodes. We can reduce electricity consumption by around 30 percent, "said Silmy Karim, Director of Krakatau Steel. Silmy added, the decline in electricity was due to the steel slab factory receiving material already in the form of hot molten steel, so that the steel melting became less. The energy for heating is only used to prepare the furnace which has been filled with sponge iron and scrap to receive hot molten steel from the blast furnace. The Company is currently conducting an evaluation to test the reliability and efficiency of Blast Furnace operations. "In every assignment, I always encourage the resolution of existing problems, especially chronic problems. Therefore, Krakatau Steel Management is currently committed to resolving every project and problem that the Company is currently facing, and the completion of the Blast Furnace project is part of the current management efforts to complete projects that should have been completed, "added Silmy. With the production of steel slabs and HRC sourced from Blast Furnace, it will encourage the Company to produce high value added products starting from production in the upstream area (Blast Furnace and SSP). This has an impact on increasing the Company's competitiveness. It is hoped that the

JAKARTA (TheInsiderStories) – Indonesia coal producer PT Bukit Asam (Persero) Tbk (IDX: PTBA) has decided to allocate capital expenditures amounting to $1.5 billion to build more than 1000 megawatt capacity coal-fired power plants next year.

President Director of Bukit Asam Arviyan Arifin stated this will include a power plant to support the electricity needs for smelters owned by state-owned mines, led by PT Indonesia Asahan Aluminium (Inalum).

“Another State-Owned Enterprise (SOE) synergy project is Kuala Tanjung power plant, with capacity of 2×350 megawatt (MW), which is a strategic project of Inalum, which will provide electricity for Inalum’s aluminum smelter expansion, targeted to start operation in 2021,” Arifin said, Friday (24/11).

Bukit Asam plans to begin construction of a coal mine-mouth power plant in early 2018, called ‘Sumsel 8’, with installed capacity of 2×620 MW.

According to an agreement with state electricity company PT Perusahaan Listrik Negara (PLN), the development of PLTU Sumsel 8 is in line with the planned development of transmission from New Aurduri, Jambi to Muara Enim, South Sumatra.

PLTU Sumsel 8 project is located in Muara Enim, South Sumatra, and was built by Bukit Asam in cooperation with China Huadian. In 2015 the company, through its subsidiary PT Huadian Bukit Asam Power, signed a loan agreement worth $1.2 billion with the Export Import Bank of China.

Bukit Asam will also build a coal-fired power plant with an installed capacity of 2×300 MW in Indagiri Hulu Riau District, which utilizes more than 4 million tons of coal per year from Bukit Asam mine in Peranap.

“PLTU uses proven technology that can generate electricity at competitive prices according to government regulations,” he said.

Bukit Asam is also cooperating with PLN to build a mine mouth power plant, Sumsel 6, with planned installed capacity of 2×300 MW in Tanjung Enim, South Sumatra, utilizing more than 3 million tons of coal from the mine in Tanjung Enim.

Meanwhile, the East Halmahera PLTU project capacity of 2×40 MW is one of the SOE synergy projects. In this case, Bukit Asam as an energy company will work together to supply the electricity supply of a new smelter factory belonging to PT Aneka Tambang Tbk (IDX: ANTM), located in East Halmahera Regency of North Maluku Province.

Mining Holding Strategic Plans

As a part of its mining holding, Bukit Asam, PT Aneka Tambang (Persero) Tbk and PT Timah Indonesia (Persero), which will all be under Inalum’s control, are scheduled to hold extraordinary shareholders meetings on Nov. 29, assumed to be an initial step toward the formation of the holding company.

Deputy of SOE Harry Fajar Sampurno said over the short term, the new holding will soon conduct a series of corporate actions, including the construction of a smelter grade Alumina plant in Mempawah, West Kalimantan, with capacity of up to 2 million tons per year, a Ferro-Nickel plant in Buli, East Halmahera with a capacity of 13,500 tons per year, as well as the construction of a coal-fired power plant with installed capacity of 1,000 MW.

‘In the medium term, the mining holding company will acquire and explore mining and integrate downstream areas in order to increase its size and become as one of the companies listed in 500 Fortune Global Company,” he said.

Through these business activities, a Holding Mining Organ will benefit not only holding companies and holding member companies, but also governments and communities.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com