Bukit Asam to raise coal transportation to Tarahan

State owned coal mining operator PT Tambang Batubara Bukit Asam (PT BA) will increase its coal transportation capacity from its mining sites in Tanjung Enim, Palembang to Tarahan coal terminal in Lampung province to 12.5 million tons from 8 million tons at present.

The company's president Sunardi said that PT BA was currently negotiating the plan with the state railway operator PT Kereta Api, which handles the coal transportation form the mining site to the coal terminal.

He said that the two companies were still discussing the fresh investment of about Rp 425 billion to increase the transportation capacity. " We hope we will soon reach an agreement and will be able to realize the plan beginning 2002," he said on Monday.

Sunardi did not explain how should the two companies shared the cost. But he said that his company would use part of proceeds to be raised from its initial public offering later this year to finance the project.

The coal mining company transports its coal by railway to Tarahan terminal before shipping the ship to the coal-fired power plant Suralaya in Merak, West Java.

Sunardi said that the Suralaya plant operator had agreed to extend the contract, which expired this year to another 10 years to 2009. About 65 percent of the power plant's coal needs come from PT Batu Bara Bukit Asam, which produces about 9.2 million tons of coal a year from its mining operation in in Tanjung Enim, South Sumatera and another 2 million tons in Ombilin, West Sumatera.

The company also exports part of the coal to Japan, Europe and Latin America. (*).