PT Bukit Asam Tbk (IDX: PTBA) targeting the coal production could reached 30 million tons (MT) in 2020, said the management recent - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian coal miner, PT Bukit Asam Tbk (IDX: PTBA) targeting the coal production could reached 30 million tons (MT) in 2020, said the management recently. The amount rise 5.26 percent from this year’ target of 28.5 MT of coal.

Marketing director’ of state-owned firm, 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 and Thailand.

In exporting the coal, the miner will transport it using national ships to adjust the government policy regarding the use of national vessels. Therefore, Bukit Asam will be able to contribute to national ships industry’s revenue.

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.

Regarding the firm’ expansion, 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.

Meanwhile, 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 currently 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.

Written by Staff Editor, Email: theinsiderstories@gmail.com