Major Indonesian coal firms on expansion mode

Indonesian major coal producers are continuing their expansion mode in 2006, taking advantage of the strong world thermal coal prices and increasing popularity of Indonesia?s environmentally friendly subituminous products.

Indonesia?s largest single mining firm PT.Adaro Indonesia is planning to increase production from 28 million tones this year to 30 million tones, company?s general manager A.H. Chia told CoalTrans participants in Nusa Dua on Monday, with 21 million tones allocated to export markets.

Chia said the company is improving its production and handling infrastructures to expand the company?s installed production capacity to 38 MTPA from 28 MTPA currently by September 2005.

Thai top energy conglomerate Banpu PCL said its Indonesian coa units would produce 17.8 million tones in 2005, up from 15.3 million tones this year. Banpu?s head of marketing and logistics Philip Gasteen said. Banpu operates four coalmines in Indonesia that are already in production, namely Kitadin, Indominco Mandiri and Trubaindo, all are located in East Kalimantan and Jorong Barutama in South Kalimantan.

PT.Kaltim Prima Coal (KPC) said it was in the process of expanding the company?s output to 40 million tones in 2006 from 30-32 million tones this year. Director Peter Ball said that KPC is currently upgrading and adding infrastructures in the company?s mine. He added that the company?s Bengalon mine, which had just commenced production this month, is geared to be able to produce 8 MT in 2006.

KPC?s sister company PT.Arutmin Indonesia said that the company is planning to produce 16 MT this year. He, however, said the company?s 2006 production would depend on the market condition.

Kideco Jaya Agung is planning to produce 20 million tones of coal this in 2006, up from a little over 18 million tones planned for this year, managing director Kim Sung Kook said. Kim said Kideco was planning to increase installed production capacity to 22 MTPA by the end of this year, but said it had no plan to increase production beyond 20 MTPA, at least for several years to come. ?The incremental capacity would be used to better service our existing customers and to keep the mine?s life time,? he said. He also added that Kideco would be concentrating to build mine mouth power plant and coal upgrade facility in its mine.

PT.Berau Coal is planning to increase production to 11 million tones in 2006, from 10 million tones planned this year.

Another coal mininghouse, Tanito Group, is planning to increase production to 7 million tones this year from 6 million tones planned for this year, director David Heap said. Heap said Tanito?s production come from the company?s Tanito Harum mine in East Kalimantan and Mahakam Sumber Jaya mine, also in East Kalimantan. Heap said later this year, its Riau Bara Harum coal mine in Central Sumatra would commence production. All Tanito?s coal are for export market.

State coal mining firm PTBA is not likely to increase production beyond 10 million tones next year due to its transportation capacity limitation, senior company official said.

Those companies' production represent around 80 percent of Indonesia?s coal production.

Indonesia is expected to overtake Australia as world?s top thermal coal from this year on. Indonesia is expected produce 150-160 MT of coal this year, with 70 percent would go to export market. (alex)