PT BA faces transportation constraint in raising production capacity

State-owned coal producer PT Batubara Bukit Asam (PT BA) is facing difficulties to boost its production capacity due to transportation constraint from its mining site in Tanjung Enim in South Sumatera to the coal terminal in Tarahan, Lampung.

PT BA's president R.A. Sunardi said that at least 1.2 million tons of coal was accumulated in the company's production site, as the train's coal transportation was still inadequate to meet the rise in the production.

Speaking at the sideline of a conference on coal for energy security in the ASEAN region in Jakarta on Wednesday, Sunardi said that the company and the state-owned railway company PT Kereta Api Indonesia had reached an initial agreement to jointly boost the railway's coal transportation capacity to Tarahan in a bid to solve the transportation problem.

According to him, the coal transportation capacity should be increased to 12.5 million tons a year from 8 million tons a year at present to enable it to accommodate the company's plan to increase its production to 12.9 million tons a year from about 11.2 million tons a year at present.

Sunardi said that the investment to boost the coal transportation capacity could reach about Rp 630 billion (1US$=Rp 9,500) but he did not say how much PT BA would share the cost. "It will depend on talks with PT KAI," he said.

Bukit Asam operates a mining area in Tanjung Enim, South Sumatera and ships its coal to local and foreign buyers through Tarahan coal terminal in Lampung. (R. Amoros)