Bukit Asam to raise prices of coal to Semen Padang, Ombilin

State-owned coal producer PT Tambang Batubara Bukit Asam plans to raise prices of its coal sold to cement producer PT Semen Padang and power pant PLTU Ombilin in West Sumatera to meet rising operation costs, Neraca reported on Wednesday.

The company did not unveil the percentage of the planned increase, but it said that the prices of the coal sold to the companies would be still lower than those sold by coal producers in Kalimantan.

According to Bukit Asam, which is now preparing its privatization, the increase in the price is necessary to allow it to develop its Ombilin coal mine. It said that the coal production in this area is still limited due to the lack of funding to develop the underground coal reserves.

The company added that coal reserves in the open-pit have been depleting and the company should therefore develop the underground one to maintain the coal production from the Ombilin mining area.

Bukit Asam, one of the country?s major coal producers, produces most of its coal from its Tanjung Enim coal mine in South Sumatera. (*)