Miners agree to supply 2.1MT of spot coal to PLN power plants

Eight coal miners on Monday agreed to some supply 2.1 million tones of coal to PLN to help the state electricity firm to build 30-day coal inventory for its major power plants in Java, PLN CEO Fahmi Mochtar said.

Mochtar said the coal producers pledged their supply commitment after a meeting which was facilitated by the Ministry of Energy and Mineral Resources.

According to him Berau Coal is committed to supply 450,000 tonnes, Adaro Indonesia

523,000 tonnes, PTBA 60,000 tonnes, Kideco Jaya Agung 310,000 tonnes, Gunung Bayan Pratama Coal 180,000 tonnes, Arutmin Indonesia 340,000 tonnes, Kaltim Prima Coal 180,000 tonnes and Jorong Barutama Greston 50,000 tonnes.

Mochtar said coal would be delivered to Suralaya, Tanjung Jati B, Paiton (PLN), Ombilin, Labuhan Angin, Paiton (PEC) and Cilacap power plants from November 2008 to January 2009.

He, however, said that both PLN and coal producers have yet negotiating price for the coal. He said that PLN hoped that the price set would not be higher than coal producers? lowest export price.

PLN had been scrambling for coal supply for the past few months, but only several coal producers were willing to participate in tenders held by PLN. The producers also asked for high price.

PLN threatened last week to import coal from Australia to resolve its coal supply crises. The threat sent government officials to rush to force coal producers to appropriate some of their production for PLN.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro on Monday proposed to put in place a coal buffer stock to secure supplies for domestic power plants.

Coal for the buffer stock would be procured by revising a policy so that producers pay royalties using coal supplies, Purnomo

"We are considering developing coal buffer stocks and PLN will be authorised to manage it so that when there's a supply problem, it won't cause a panic," Purnomo said.

Under the current scheme, the government gets 13.5 percent of miners' total coal supplies. Miners have to return the proceeds from the sale of this coal back to the government.

Purnomo said Indonesia may be able to get around 30 million tonnes of coal for buffer stocks under the plan.(bernard)