Bukit Asam to quit Ombilin mine

State owned coal mining company PT Bukit Asam would spin off its Ombilin mining operation in West Sumatra in a bid to speed up its privatization program, Bisnis Indonesia reported on Saturday.

The company's president A. Sunardi said in Padang over the weekend that the plan to split the Ombilin unit had been reported to the ministry of finance a long time before the provincial administration of West Sumatera demanded the spin-off.

He said that the company had yet to receive the response from the government about the spin-off plan but he added that he was sure the split plan would receive a positive response.

Bukit Asam, which operates coal mines in Ombilin, West Sumatera and Tanjung Enim in South Sumatera, is one of several state companies, which will be privatized by the government this year. The local people in Ombilin, however, opposed the privatization of the coal mining company, and if the government go ahead with the plan, the Ombilin should be split from Bukit Asam,

Sunardi said that the coal deposits at the Ombilin mining operation have been well depleted and those found in open mining areas would last only for three years. He acknowledged that there are significant deposits founds under the ground but it would be too expensive for the company to produce them.

Bukit Asam would use proceeds from the privatization to partly expand the coal transportation capacity from the coal mining site in Tanjung Enim, South Sumatera and Tarahan port in Lampung province, Media Indonesia reported on Monday.

He said the project would able to increase the coal transportation capacity to 12.5 million tons per year beginning 2002 or 2003, an increase by about 4.5 million tons a year from the present capacity. "It is certainly a feasible investment," he added.(*)