PLN plans $1 billion investment in coal mines

State electricity utility, Perusahaan Listrik Negara (PLN) said that the company may invest up to US$1 billion to acquire stakes in local mines to secure supply of coal for its power plants' boiler fuel.

"For the long-term, PLN has to own the mines itself, because, with demand as big as ours, we have to ensure a certain level of supply security," Helmi Najamuddin, the head of PLN's coal division, said in an interview with Reuters.

By 2016 PLN expects to be consuming at least 116.7 million tons of thermal coal, compared to 57.3 million expected this year.

Coal output is expected to remain stable at 360 million tons this year, with top buyers being China, India and Japan. Najamuddin pointed out however that without any new major exploration Indonesia's coal reserves could be depleted within 40 years.

"We don't want a situation in future where we have to import," Najamuddin said. (*)