Bukit Asam demands Indonesia Power to pay a higher price for its coal
Wednesday, May 23 2001 - 08:30 AM WIB
The state-owned coal mining company PT Bukit Asam had demanded a higher price for its coal supplied to the Suralaya coal-fired power plant, which is owned by state-owed power utility PT Indonesia Power.
The Kompas daily quoted head of Bukit Asam business development division Tiendas Mangeka as saying that the higher price was needed to avoid the company from going bankrupt as production cost had soared particularly with the recent increase in fuel prices and labor wages.
He added that coal produced by private coal mining companies had been selling at higher prices.
He said that Bukit Asam was currently negotiating for the new price level with Indonesia Power.
Tiendas said that the company was proposing a new price of Rp 210,000 (US$1=Rp 11,400) compared to the old price of Rp 140,000 per ton.
He said that Bukit Asam had supplied around 6.1 million tons of coal per year, and planned to increase it to between 7-8 million tons per year after rail transportation capacity had been upgraded.
Meanwhile, a source at Indonesia Power told Petromindo.com that the company would reject the new price demanded by Bukit Asam because it was too high. The source said that coal with similar quality of less than 5,500 kilocalorie produced by other companies was being sold at lower price than demanded by Bukit Asam.
Bukit Asam supplies 485,000 tons of coal each month to Indonesia Power's Suralaya coal fired power plant. (*)