Semen Gresik eyes two coal mines in Kalimantan

By Audy Zandri

A recently set up coal mining unit named PT SGG Energi Prima, a subsidiary of Indonesia's largest cement producer PT Semen Gresik, is eyeing two mining concessions in Kalimantan to secure coal supplies for its cement factory.

"One in South Kalimantan and another one in East Kalimantan," said SGG Energi Prima President Director Mat Sulkan to CoalAsia.

Mat refused to disclose the exact location of the mines or the names of the concession holders as evaluations are still underway.

"But if every thing goes as planned, production should start in early 2013," he said, adding that the company has decided to focus on coal with calorific value between 4,700 and 4,800 kcal/kg.

Currently receiving coal supplies from third parties through one year spot contracts, SGG Energy Prima expects to first cover 25 percent of its cement plants coal demands, specifically to power the currenntly being developed Tuban IV in East Java and Tonasa V cement plants in South Sulawesi. Both plants are expected to start operation in the first and third quarter of this year, respectively.

"Obviously, we will not be able to cut our existing coal contracts yet," he said.

PT Semen Gresik said it required 3.2 million tons of coal per year to power its plants, a figure that would rise to 4 million tons once its two new cement plants start their operation.

Editing by David Mustakim