PTBA stops coal exploration for six months

PTBA stops coal exploration for six months

Photo ducument of coal production. (ANTARA/Rosa Panggabean)

"Currently, 65 percent of the company`s coal production is disposed of on the domestic market"
Jakarta (ANTARA News) - State-owned coal mining PT Bukit Asam said it was planning to temporarily stop coal explorations for six months, its corporate secretary said.

PTBA Corporate Secretary Joko Pramono told the stock exchange here on Monday that his company would stop explorations for the October 2012 - March 2013 period, except for areas in which it already has received exploration licenses.

Earlier, PTBA said it set a target of reaching a net profit of Rp3.4 trillion in 2012, up 111.1 percent compared with 2011`s profit of Rp1.61 trillion.

Further, President Director of PTBA Milawarman said his company would focus on seeking coal mining areas with high margins of profit.

Earlier, PT Perusahaan Batubara Bukit Asam Tbk (PTBA) said it plans to export more coal to India due to the growing demand from the Hindustani state.

Milawarman said last month that demand for coal has grown from India, offsetting the declining demand from China. The company will only produce enough coal to meet market demands.

"Currently, 65 percent of the company`s coal production is disposed of on the domestic market, with 35 percent for exports," he said.

The company`s largest buyer in the country is the state electricity company PT Perusahaan Listrik Negara (PLN), which uses coal to feed its coal fired power plants.

About 80 percent of its sales are on contract, including 60 percent with PLN, Milawarman said.

He noted that he is optimistic that coal prices would improve in the second half of the year, with growing demand from India.

He said the sales target of 16 million tons this year could be reached, but it would depend upon the readiness of the railway, as the main transport means from its largest coal mine in Tanjung Enim in South Sumatra.

The company has said it could not boost production because of transport problem from the mine to the market, especially between the mine and the seaports.

The company, there, has two railway projects in southern Sumatra. It has a project to build a 270-kilometer rail tract for coal transport between Tanjung Enim and Tanjung Siapi Api port town in South Sumatra.

The railway project will be built jointly with Adani Global from India. Bukit Asam will also build a coal terminal in Tanjung Siapi Api to facilitate shipment of coal to other areas or for exports.

Last year, the company produced only 12.5 million tons from Tanjung Enim and this year it hopes to raise production to 16.3 million tons.

The operation of the railway would allow it to boost production up to 35 million tons a year.

Bukit Asam also is participating in the project to build a 307-kilometer double tract linking Tanjung Enim and the Srengsem port in Lampung.

Bukit Asam holds a 10 percent stake in the 307-kilometer railway project, which is 80 percent owned by the Rajawali Group and 10 percent by China Railway Group Ltd.

In the first half of the year, the company reported Rp1.56 trillion in net profit, down 3 percent from Rp1.61 trillion in the same period last year.

Sales rose 14 percent to 7.08 million tons from 6.19 million tons, with prices rising 0.5 percent to Rp785,040 per ton year-on-year.