PTBA to spend over Rp 2.5 trillion in 2013 including for port expansion

IDX-listed coal miner PT Bukit Asam (PTBA) plans to spend more than Rp 2.5 trillion (US$258.13 million) including to fund coal port expansion in Tarahan, Lampung, to meet the company's target to increase coal sales by 25 percent to 20 million tons this year.

"The project will enable the port to manage large vessels and increase its annual coal handling capacity to between 22 million tons and 25 million tons from the current 15 million tons per year," The company?s President Director, Milawarma, said as quoted by The Jakarta Post.

The port expansion project, estimated to cost Rp 1.5 trillion, will consist of the construction of a new ship loader and a new dock, and the purchase of four new rotary car dumper (RCD) units.

At the moment, the port, which has only two RCD units, is only able to handle medium-sized vessels. The newly revived Tarahan port is scheduled start operation in the middle of 2013.

By accommodating large vessels, the publicly listed company also hopes to reduce its overseas freight costs as the Tarahan port functions as the point of origin for its exports to China, India, Japan, Taiwan and Vietnam.

?The bigger the vessel, the cheaper the cost will be. We may he able to reduce the freight costs to China, for example, by $3 per ton. The reduction will certainly benefit us,? he said.

This year?s expansion funds will come from the company?s internal cash. However, according to Milawarma, the expansion budget does not include funds to finance future mine acquisitions. The firm had held talks with other parties, but had not yet finalized any deals, he said.(*)