Pranap power plant will cost $600 million

State owned coal mining company PT Tambang Batubara Bukit Asam (PT BA) and PT Indonesia Power will need at least US$600 million to realize their plan to construct a minemouth power plant, and to open up coal mining in Indragiri Hulu, Riau.

PT BA?s president R.A. Sunardi said on Tuesday that the investment for the construction of the 500-MW minemouth Pranap power plant and its transmission facilities would reach about $439 million.

The additional investment for the development of the coal mining, which will cover an area of about 500 hectares, will be about $160 million, he said in a business presentation in Pekanbaru.

"The 55,000- hectare concession area is estimated to contain coal reserves of 1.9 billion tons, and they could last for 50 years,? he was quoted as saying by Bisnis Indonesia.

He explained that the power plant would be constructed in Indragiri Hulu regency, where larger part of the coal concession area is located. Some part of the coal concession is also located in Kuantan Singingi regency.

Sunardi said that part of the electricity would be supplied to the Sumatra Grid, which covers areas of West Sumatera, Riau and South Sumatera beginning in 2008. Part of the electricity would be sold to Malaysia, which is estimated to suffer power shortage beginning 2010, he said.(*)