PTBA set to increase ownership in coal railway project

State coal mining company PT Tambang Batubara Bukit Asam (PTBA) plans to increase it ownership in Bukit Asam Transpacific Railway (BATR), which will soon begin coal railway project in South Sumatra .

PTBA president director Sukrisno said in Jakarta over the weekend that PTBA planned to increase its share ownership in BATR to 30 percent from about 10 percent at present. ?The transaction will be completed before the ground breaking of the railroad in November, this year,? he added.

At present, PTBA has a 10-percent stake in BATR, with PT Rajawali Corporation holding an 80 percent and Chinese company China Railway Engineering the remaining 10 percent.

Sukrisno said that PTBA would need about $320 million to buy another 20 percent of BATR shares from Rajawali. ?We will use our internal funds about 30% and the remaining will come from bank loan,? he added.

As reported earlier BATR will build a railroad with a 308-kilometer length which will be used to transport coal from PTBA?s coal mine in Bangko Tengah, South Sumatra province to a coal terminal in Lampung province.

The US$1.6 billion railroad project will be financed by loans from a number of Chinese banks. When the project is completed, PTBA can increase its production to 20 million tonnes a year. (giok)