PTBA to stop exports of low grade coal

PT Bukit Asam (PTBA) will stop exports of low grade coal next year as part of the company?s business strategy to improve cost efficiency and to be able to compete amid the fall of coal prices in the world market, Bisnis Indonesia reported on Wednesday.

PTBA?s President Director Milawarma said in 2013 the company would only export high grade coal in order to be able to reduce production and distribution costs. ?Exports of low grade coal will be stopped. So, our exports will comprise only of high grade coal,? he said on Friday.

He said that the company would also expand production capacity by about 25 percent next year from about 15 million tons in 2012. ?With the production capacity expansion, the production costs could be lowered,? he said, adding that the company would also reduce the use of oil by using more electricity from its coal-fired power plant in order to cut down operation costs.

As part of the cost efficiency program, next year, the company would also expand its port to enable it to receive a bigger ship for the transportation of its coal. ?With the expansion, the port can receive a ship with a capacity of 15,000 tons,? he said.

PTBA is also a main supplier of state owned electricity company PT Perusahaan Listrik Negara (PLN) and several other local companies. Next year, PLN?s coal demand is expected to increase to 63.2 million tons from about 57.3 million tons this year.

PTBA has also secured contracts to supply about 73.1 million tons to state fertilizer company PT Pupuk Indonesia (Persero) and PT Sumber Segara Primadaya. Of the 73.1 million tons, about 4.5 million tons would be allocated for Sumber Segara, the owner of PLTU Cilacap coal fired power plant, which has capacity of 2 x 300 MW. (*)