Coal producers agree to meet Indonesia Power's coal demand

In an effort to end electricity crisis which has affected some parts of Java lately, a number of coal producers agreed in a meeting on Thursday to set aside some of their production to meet Indonesia Power's coal demand despite their production shortage. State owned coal company PT Bukit Asam agreed to supply 485,000 tons of coal per month throughout the year, PT Adaro Indonesia would supply 85,000 per month, PT Kideco 135,000 tons per month. Starting from July PT Berau Coal would also supply 45,000 tons per month.

For May delivery, Adaro would increase its supply to145,000 tons while Berau Coal would planned to raise the supply to 45,000 tons. There was also a possibility that Kideco would set aside another 45,000 tons for the May shipment.

Indonesia Power's Suralaya plant, with a generating capacity of about 3,000 MW, had been forced to reduce its generating capacity to only 1,700 MW due to a shortage of coal supply from Bukit Asam and other coal producers.

The Suralaya plant needs some 990,000 tons of coal per month to fully operate its seven power generating units. About 90,000 tons of the monthly coal requirement will be stored to increase its stock.

The coal companies had reduced their coal supply to the Suralaya plant as the price set by Indonesia Power was much lower than international price.

An analyst who declined to be named said the decision would force the companies to lower their shipment to overseas market, as most of them could not increase their output for various reasons. Most of their existing production had been also committed to certain buyers.

He also warned the influx of coal shipment in Suralaya's port could slow down the unloading process. (alex)