Correction-Update: PTBA launches ambitious plan to boost output to 60MPTA by 2010

Editor's note: The article titled: "PTBA launches ambitious plan to boost output to 60MPTA by 2010", was based on oral interview with PTBA director Soekrisno. PTBA in its announcement that appeared in The Jakarta Stock Exchange provided more detail and more detail of the Chinese parties involved in the construction and financing of the projects.

Below is the correct article.

PTBA launches ambitious plan to boost output to 60MPTA by 2010

State coal miner PT. Tambang Batubara Bukit Asam (PTBA) said the planned transportation and mine-mouth power projects would dramatically increase production by from 10 MTPA currently to 60 MTPA by 2010, when the US$3.2 billion projects are expected to be completed, a company official said.

PTBA production director Soekrisno told Petromindo.Com on Thursday that the deal company had signed agreement with two consortiums of local firms that are backed by Chinese firms would enable the company to ship 40 million tones of coal annually and the 2,400-MW power plant would require PTBA to produce 10 million tones annually.

Soekrisno said that a consortium formed by PT Transcoal Nusantara and PT Trimitra Adiyasa (Sinar Mas Group) and backed by Chinese firms China Investment Trust International Corporation (CITIC) and China Coal would build railway system and dig navigation canal from PTBA?s Tanjung Enim mine through Bangka Channel and a deep sea coal terminal located at Muntok, Bangka Island. The system, which is expected to cost $500 million, would be capable transport 20 MTPA of coal annually.

Another consortium led by local firm PT.Transpacific Securindo team up with China Railway Engineering Corporation (CREC) is proposing to build a new railway transportation system from Tanjung Enim to Tarahan, that would enable PTBA to transport another 20MTPA to Tarahan coal port. Soekrisno said the initial investment costs is estimated at around $600 million.

Soekrisno said that detailed feasibility studies on the projects are still ongoing. He said in return for infrastructure development, the Chinese backer would secure at least 30 MTPA of coal annually to be shipped to China.

Sources said that China Development Bank had agreed to support the financing of the projects during President Susilo Bambang Yudhoyono?s visit to China last month.

The 2,400-MW power plant, in which Chinese power firm China Huadian would take majority shareholding with its local partner tycoon Sudwikatmono-controlled Indika Group, would boost PTBA?s production by another10MTPA. PTBA and state electricity firm PLN would take minority stake at the power plant. Informed sources said that the power plant and the mine would stay as separate entities and PTBA would hold at least 80 percent stake at the Bangko mine, with another 20 percent possibly going to PLN. The project costs to develop the power plant is estimated at $2.1 billion and deals regarding financing readiness from the Chinese side had also been signed during SBY?s visit to China.

Soekrisno went on to say that PTBA and state railway company PT.KAI, which currently transport all of Tanjung Enim?s production had also sought possibility to increase Tanjung Enim-Tarahan transporation capacity from 7.5 MPTA to 12.5 MPTA with addition of another set of locomotives and trains. ?Talks are still ongoing, but deal hasn?t been closed,? he said.

PTBA has billion of tons of coal reserves but thus far only able to produce 10 MTPA due to lack of railway capacity. PTBA sells 70 percent of its coal production to 3,400-MW Suralaya power plant in Banten province. (godang)