Bukit Asam to invest US$2.4b on railway

Indonesia-listed state coal miner PT Bukit Asam Tbk (PTBA) said it will be spending up to US$2,4 billion in the construction of the 270km long Babaranjang double-track railway which will connect Tanjung Enim with Tanjung Siapi-api port, in an effort to boost coal transport capacity to 35 million tons per annum.

Bukit Asam President Director Milawarma stated to have completed the feasibility study with Indian based Adani Global, revising the initial investment estimation of US$1.5 billion.

"But the land capping will have to wait for the completion of the currently on going mining area management area scheme restructuring," he said as quoted by Bisnis Indonesia on Friday.

In addition to the project, Bukit Asam also has 10 percent stock in another 307 km long double-track Babaranjang railway project, connecting Tanjung Enim and Srengsem Port in Lampung.

The company aims to raise its stake with addtional 20 percent which will strengthen its involvement in the project, currently controlled by Grup Rajawali with 80 percent stake and Cina Railway Group with the remaining 10 percent. The railway will boost the company's output by 25 million tons per annum..

Bukit Asam reported that it produced 12.5 million tons of coal last year and realized 13.6 million tons of sales. The company expects to raise production to 16.3 million tons this year, targeting 18.6 million tons of sales.

The consortium said that it is currently working on land release efforts cooperating with the regional governments South Sumatra. The blueprint of the project is completed, but construction, said Milawarma, will have to wait until 75 percent of land release process is completed.

Previously, Head of Public Relation of PT Kereta Api Indonesia (KAI)Sugeng Priyono stated that the state company will progressively provide up to 1,400 units of railway coach for coal transport business until 2013. (*)