PTBA and Indonesia Power negotiation over coal prices deadlocked

Negotiation between coal mining company PT Tambang Batubara Bukit Asam and state-owned electricity company PLN's subsidiary Indonesia Power (IP) over the price of the coal sold by the South Sumatra-based coal miner to the Suralaya coal-fired power plant in Banten has come to total deadlock as both companies had failed to work out a compromise.

Ahmad Sadikin, director of IP which operates a number of large power plants including the Suralaya power plant, acknowledged Friday that the negotiation over the coal price had collapsed.

"The negotiation had failed as both of us refused to make any compromise. We have therefore decided to raise the case in the company's shareholders meeting," Sadikin said.

PTBA had proposed to raise the price of coal it sold to the Suralaya power plant to between Rp 374,000 and Rp 384,000 per ton from about Rp 272,000 per ton last year to compensate an increase in the transportation fee it had to pay to PT Kereta Api Indonesia.

But IP rejected the proposal, saying that the price increase requested by PTBA was too high.

As of May, PTBA supplied about 2.15 million tons from total contract 6.1 million tons of coal to the power plant, and planned to supply the remainders in the rest of the year, PTBA corporate secretary Milawarma said on June 13.

PTBA technical director A.C. Purba said Friday that PTBA would continue the coal supply according to the existing contract despite the failure in the negotiation. (godang)