Kideco sees 2005, 2006 coal production flat at 18 MT

East Kalimantan coal miner PT.Kideco Jaya Agung sees its 2005 coal production at 18.2 million tones, a little over 18 MT target for this year, a company official said on Friday.

Managing director Kim Sung Kook told Petromindo.Com that the company planned to slightly increase coal production to 18.5 million tones next year.

Kim said that Kideco expected thermal coal price will face downward pressure early next year due to over supply, but would pick up again in the second half.

?That?s why Kideco does not want to put more supply to the market,? said Kim.

Kideco?s optimum capacity is currently around 19 MTPA.

Kideco sells 65 percent of its production to overseas market such as South Korea, Taiwan, Italy and UK, while domestically it supplies coal to Paiton Energy?s 2 x 615 MW power plant (1 MTPA), Jawa Power?s Paiton II 2x610 MW power plant (1.8 MTPA), both are located in East Java and to PLN?s 3400 MW Suralaya power plant in Banten province (2MTPA).Kideco will also supply 0.5MTPA to Cilacap 2x300MW power plant starting next year.

Kideco?s contract with Suralaya would expire this year and Kim said that Kideco was hoping to extend supply contract. ?Kideco is still in the position to offer coal supply for Suralaya and we haven?t received notice that Kideco fails in the bid,? said Kim. Suralaya official earlier said that it had picked several suppliers which exclude major coal suppliers such as Adaro Indonesia, Kideco and Berau and turned into smaller scale coal suppliers which offer cheaper prices. But industry source said due diligence conducted by Indonesia Power showed that some of the suppliers are not credible and many suspected that the coal would be sourced from illegal sources.

Kim also said Kideco had withdrawn from coal supply bid to 2x660 MW Tanjung Jati B power plant in Central Java for unspecified reason. (alex)