Indonesia’s Bukit Asam to Invest US$464.28 M this Year

Indonesia's Bukit Asam to Invest $464.28M this Year
PT Bukit Asam Tbk, PT Pertamina and United States' Air Product Launched the Coal Downstream Plant into Dimethyl Ether (DME) in Peranap mine, Riau, on Thursday (02/07) - Photo by PTBA

JAKARTA (TheInsiderStories) – Indonesian coal miner, PT Bukit Asam Tbk (IDX: PTBA) budgeted Rp6.5 trillion or US$464.28 million for investment in 2019. This value is the same as the realization of investment spent in 2018 amounting to $464.28 million, said senior officer today (03/11).

President Director of Bukit Asam Arviyan Arifin, said as much as Rp5.34 trillion from the investment fund will be used to carry out several development projects including increasing coal transportation capacity.

Arviyan explained that his party had agreed to agreement with PT Kereta Api Indonesia regarding the development project to increase the capacity of coal to 60 million years by 2023.

In addition, the company will also reactivate the Tanjung Enim-Kertapati and Tanjung Enim-Tarahan train lines through cooperation with Kereta Api Indonesia of this year. Through this reactivation, Arviyan hopes that coal transportation capacity in 2019 can reach 20.3 million tons and in 25 million tons in 2020.

Then, the company will also develop dock and port facilities. He said that in 2023 port capacity could be better.

For downstream business, the company will complete the feasibility study for the construction of the downstream integration plant in Tanjung Enim. In the next 2022, Arviyan hopes the factory which be made together with Pertamina, Pupuk Indonesia and Candra Asih will be operational.

Regarding the coal gasification plant, the company is still completing the discussion process with PT Pertamina.  “At present we continue to hold meetings to discuss design issues and the portion of investment development,” said Arviyan.

Furthermore, Bukit Asam also plans to form a joint venture with PT Antam Tbk (IDX: ANTM) with an investment of $350 million which is targeted to be operational by mid of 2023. The joint venture was formed to build two steam power plants and diesel power plants in East Halmahera Regency, North Maluku.

Arviyan said that the steam power plants to be built will have a capacity of 3×60 megawatts (MW) and diesel power plants with a capacity of 3×17 MW.

He added, in this joint venture subsidiary Bukit Asam would own 75 percent of the shares, while the rest would belong to Antam.

The plant is intended to provide energy supply for Antam’s ferronickel plant in East Halmahera. The steam power plant is estimated to consume 650.000 tons of Bukit Asam’s coal per year.

Bukit Asam also plans to expand the export market this year by marketing the high calorie coal production which is much needed by the international market.

Currently, the Bukit Asam’s export markets are still traditional markets from China, India and Japan. He said starting last year the company began expanding the export market to several other Asian countries such as Vietnam, Philippines, Hong Kong, South Korea, Laos and Sri Lanka.

In 2019, it targets total export sales to reach 14.1 million tons or increase by 4 million tons compared to the export sales volume in 2018 which amounted to 10.7 million tons.

The company recorded an increase in revenue and profit in 2018, supported by good domestic and export sales last year. The domestic market contributes 59 percent of total sales and the remaining 41 percent is the export market.

Throughout 2018, Bukit Asam recorded a net profit of Rp5.02 trillion, up 112 percent compared to 2017, supported by an increase in company income. It was recorded that the company’s revenue throughout 2018 was Rp21.17 trillion. This income is up nine percent compared to 2017.

Last year, the company also produced 26.4 million tons of coal. This figure is up seven percent compared to 2017 production of 24.5 million tons.

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