Adaro delays overland conveyor construction

IDX-listed coal miner PT Adaro Energy has delayed the construction of the overland conveyor (OLC) at its coal mining unit PT Adaro Indonesia (AI), the company?s official said on Tuesday.

Deputy GM corporate secretary Devindra Ratzarwin was quoted by Bisnis Indonesia as saying that the company is now focusing to build 5-km out pit & crushing conveyor (OPCC) than an OLC system.

He said that the company doesn?t have any financial obstacle to build the OLC. The company is expected to start the construction of the OLC next year and complete it in 2012-2013.

In February 2010, Adaro appointed local firm PT. Tripatra Engineers and Constructors as the engineering, procurement and construction (EPC) contractor for the OLC project.

?The construction of the project is expected to start soon and to be completed and commissioned in early 2012,? the company said on Feb 9, 2010.

The OLC will consist of a conventionally-designed, six-flight conveyor, with each flight ranging from 2.4 km to 9.9 km in length, and six transfer stations. The total length of the OLC is 37.8 km..

The OLC will provide an alternative mode of transportation and is expected to reduce operating costs by US$2-3 per ton compared to the use of trucking. The distance of the OLC will be 37.8km, which covers approximately half the distance of the existing 75km hauling road.

The OLC system will also include a crushing plant, stacking system and barge loaders, with an estimated total investment of around US$240 million.

The project will be financed entirely by the proceeds from Adaro?s US$800 million 10-year bonds issued in October 2009

The OLC will be powered by Adaro Energy?s own 2x30 megawatt (MW) mine-mouth power plant.

The project is part of Adaro?s plan to increase production capacity to 80 million tons per annum (MTPA) in 2014 from 45 MTPA currently. (*)