Ministry warns of incapability of PLN?s coal suppliers

Ministry of Energy and Mineral Resources doubts the ability of four out of five producers to supply coal to the proposed coal-fired power plants that would be built by state electricity firm PLN under the so-called crash program.

Ministry?s Director of Coal and Mineral Enterprises MS. Marpaung told Petromindo.Com on Tuesday that survey conducted by the ministry revealed that the four companies are laden with problems ranging from unclear reserves, reserves located in protected forests and overlapping mining areas with other companies.

?I very much doubt the ability of the four companies to fulfill their commitments to supply coal to PLN?s proposed power plants in 2009-10,? he said, adding that of the five selected suppliers, only South Kalimantan coal miner PT.Arutmin Indonesia has proven ability to fulfill its commitment. Moreover, said Marpaung, the four companies are thus far unable to produce laboratory inspection result of their coal samples.

PLN in October 2006 signed letter of intent (LoI) with five consortiums to supply 21 million tonnes per annum of low rank coal to company?s existing power plants and proposed power plant projects that are scheduled to commence electricity production between 2009-2010.

PLN signed LoI with consortium of PT.Arutmin Indonesia and Darma Henwa, both of which are controlled by tycoon cum minister Aburizal Bakrie to supply 10 million tonnes of coal per annum. Jambi-based coal miner Titan Energy signed LoI to supply 3.5MTPA, while Consortium Kasih Industri Indonesia and Senamas Energindo, Baramutiara Prima and Surya Sakti Darma Kencana will supply 4.5MTPA, 2.3MTPA and 0.52MTPA, respectively.

Marpaung said he had reported the findings to the Head of the team of the government?s power crash program Yogo Pratomo and to PLN. ?I?m afraid that the government?s plan to speed up operations of coal-fired power plants could be compromised by unreliable suppliers,? he said.(godang)