PKN develops coal briquette, upgrading facilities

East Kalimantan-based coal mining firm PT Pesona Khatulistiwa Nusantara (PKN) has embarked on a diversification strategy by developing coal briquette and upgrading facilities as well as power plant to help cope with the lingering downturn in the global coal market, Kontan reported on Monday.

The paper quoted PKN President Director Jeffrey Mulyono as saying that the company has allocated US$1 million to develop a coal briquette production facility with capacity of 60,000 tons per year. ?Construction has started, we expected the plant to start operation in December,? he said.

PKN is also investing $13 million to develop a 7.5 MW coal-fired power plant, excluding a $15 million for coal conveyor facility, Jeffrey said.

He added that for the planned coal upgrading facility, the company will team up with a Chinese investor and technology provider from Australia.

The coal upgrading facility will require input of 1.2 million tons of 3.200 kcal per kg low rank coal per year to produce 700,000 tons per year of coal with calorific value of 5,000 kcal per kg.

The coal upgrading facility and power plant are expected to start operation in March of next year.

Jeffrey said that the diversification measures are expected to help the company cope with the current downturn in the global coal market.

PKN, which operates a 21,875 ha coal mine in Bulungan Regency, East Kalimantan, expects revenue this year to decline by about 12.1 percent to US$94 million from last year?s $107 million on lingering drop in coal prices amid oversupply situation in China and India, two of Indonesia?s key export markets.

Jeffrey said that production volume is targeted to increase to 4.7 million tons this year from 4.2 million tons last year. About 4.6 million tons of the output will be exported. As of September of this year, output has reached about 3,4-3.5 million tons. (*)