Indonesia’s Bukit Asam Eyes Brunei Darussalam Market

PT Bukit Asam Tbk (IDX: PTBA) eyeing Brunei Darussalam market to offset the traditional market like China and India, said the spokesman on Monday (07/14) - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesia’ coal miner PT Bukit Asam Tbk (IDX: PTBA) eyeing Brunei Darussalam market to offset the traditional market like China and India, said the spokesman on Monday (07/14). The weak demand from the major markets has bring the state-owned firm sales volume fell by 20 percent compared to last year.

According to Apollonius Andwie, the low demand has also caused the global prices plummet. The company targeting to produce 30 million tons (MT) of coal in this year. The amount rise 5.26 percent from last year 28.5 MT of coal.

Marketing director’ of Bukit Asam, Adib Ubaidillah said, that the production will be used to meet domestic consumption and export demand. He said, power producer, PT Perusahaan Listrik Negara (PLN) will absorb 60 percent of the production and the rest will be exporting to India, Taiwan, Pakistan, Bangladesh and Thailand.

The miner also hopes to be able to deliver 50 percent products directly to the end user without bridged by trader. Nowadays, around 70 percent selling is still using trader.

Currently, Bukit Asam has finalized the feasibility study of coal gasification project. Bukit Asam’s CEO Arviyan Arifin said that based on the result of the feasibility study, Tanjung Enim will be the location of the project as the readiness of infrastructure compared to Peranap in Riau.

He expect all of the process are targeting to be completed in 2021. The building process will take time around three years and will be operate in 2024.

The plant, Arifin added will not only process coal to gas, but also other profitable derivative products. The derivative products like methanol will have added value seven times higher than the main products as methanol is pivotal in biodiesel making.

In building the plant, Bukit Asam will team up with Pertamina and US investor, Air Products and Chemical. The three parties have agreed to build joint venture company with investment of US$ 3.5 billion.

The joint venture company will process upstream and downstream product. In upstream processing, Air Production will be the majority shareholder while in downstream processing, Bukit Asam will be the majority shareholder.

In this year, the coal producer allocated capital expenditure of Rp4 trillion for next year. The miner planned to use investment funds for a number of projects.

Bukit Asam will work on the coal gasification project, the development of coal transportation and the Mulut Tambang Sumsel 8 in Muara Enim project in South Sumatera. Beside, the company is in the process of developing two steam power plant projects in the Muara Enim and East Halmahera areas with total investment of $2.03 billion.

The project is being built by PT Huadian Bukit Asam Power, a consortium between Bukit Asam and China Huadian Hongkong Company Ltd. This project requires an investment of $1.68billion, funded by Exim Bank of China.

In addition, Bukit Asam is also collaborating with PT Antam Tbk (IDX: ANTM) to build the Feni power plant in East Halmahera, North Maluku. The power plant project which has a 3×60 megawatts (MW) power plant capacity and a 3×17 MW diesel power plant. This project requires an investment of $350 million, which can be funded by banks.

Indonesia is targeting to export 400 MT of coal in this year. As of May 31, only 175.15 MT of coal have been actualized—a decline of 10 percent compared to the same date last year.

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