Bumi and Posco to jointly build mine mouth coal-fired power plant

Indonesia?s largest coal producer PT Bumi Resourcess Tbk and Korean company POSCO Engineering and Construction will team up to build and operate a coal-fired power plant with capacity of 2 x 300 megawatt in South Sumatra.

Bumi director Dileep Srivastava said as quoted by Kontan in Jakarta Thursday that the two companies would establish a consortium to develop and build the US$1 billion power plant. Bumi will have only a 5 percent stake in the consortium, but its subsidiary Pendopo Energi will have a 85 percent stake.

He said that the mine-mouth power plant would be located at a coal mine owned by Pendopo Energi in Muara Enim, South Sumatra. The mine will provide coal for the power plant. Pendopo Energi is 85 percent owned by Bumi, and the remaining 15 percent by PT Darma Henwa, also a subsidiary of the Bakrie Group.

The electricity from the power plant will be sold to PLN.

He said the consortium would sign a power purchase agreement (PPA) with state electricity company PLN in the first quarter of this year. At present, the project is under feasibility study. (*)