S. Sumatra weighs temporary coal haulage exemption for cement plant

South Sumatra provincial government is reviewing a request from PT Semen Baturaja Tbk (IDX: SMBR) for a temporary exemption to use public roads to transport coal, as the company transitions to rail-based logistics.

The exemption would apply during a transition period while Semen Baturaja reactivates a railway line and prepares coal stockpiling facilities, a process the company estimates will take four to six months, officials said.

Apriyadi, an assistant governor at the South Sumatra Provincial Government, said the review aims to balance consistency in enforcing a ban on coal haulage on public roads with the need to safeguard operations of strategic industries.

 “The request is for up to six months, though the company says it could be completed in about four months if work proceeds optimally,” Apriyadi told reporters on Monday. He said no decision has been made, and the review is being conducted cautiously to avoid perceptions of policy inconsistency.

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Any exemption would be subject to strict criteria and would not be broadly applied, Apriyadi said, adding that consideration would be limited to companies with urgent production needs and demonstrable progress on alternative transport infrastructure, such as cement producers and power plants.

Semen Baturaja’s chief executive Suherman Yahya said the company is committed to shifting coal transport from roads to rail but remains reliant on existing on-site coal stocks to keep its plant operating.

South Sumatra has enforced a ban on coal transportation using public roads to reduce congestion, road damage and safety risks, after years of complaints from local communities. Under the policy, coal producers and users are required to shift logistics to railways, rivers or dedicated haul roads, with limited transitional flexibility granted on a case-by-case basis.

Editing by Alexander Ginting