Semen Gresik sets up new coal mining unit to secure coal supply
Monday, February 20 2012 - 02:19 AM WIB
Semen Gresik President Director Dwi Soetjipto said that the establishment of SGG Energi Prima was part of the company?s strategic measures to secure an energy supply for ith cement factories.
?Semen Gresik as a group is facing callenges to secure a supply of energy and electricity in accordance with its long-term development plans,? Dwi said in a written statement available on Semen Gresik?s website.
Dwi cited that the Semen Gresik Group needed up to 3.2 million tons of coal per year. The company, Dwi continued, would need up to 4 million tons of coal per year when its two new cement plants, Tuban IV in Tuban in East Java and Tonasa V in Pangkep in South Sulawesi, which were both still under construction, started to operate in the first and third quarters of the year respectively.
Currently, Semen Gresik leads a holding company of state-owned cement producers, including PT Semen Padang and PT Semen Tonasa. Semen Gresik also has subsidiaries, including PT Kawasan Industri Gresik, PT Industri Kemasan Semen Gresik, PT United Tractors Semen Gresik PT Swadaya Graha, PT Varia Usaha and PT Eternit Gresik.
The new subsidiary, SGG Energi Prima, will operate in coal rnining activities, coal transportation, coal and its derivatives trading as well as expansion, which covers cooperation with other companies and the acquisition of coal mining areas.
Semen Gresik director for business development and strategy Erizal Bakar said that the company?s initial investment for SGG Energi Prima had reached Rp 500 billion, which was supported by Semen Gresik?s capital expenditure.
?Further investment for SGG Energi Prima will depend on the results of an evaluation concerning the company?s acquisition of possible coal mining companies or mining areas,? Erizal told The Jakarta Post on Sunday.
SGG Energi Prima, which is based in Gresik, East Java, has yet to operated any mining area.
?We are studying possible colaboration with other companies and the potential take over of mining areas, possibly in Riau, West Sumatra or Kalimantan. We are looking at companies that already carry out operations or remain in the exploration process in mining areas,? Erizal said.
The new company was expected to start supplying coal for Semen Gresik this year, according to Erizal.
?When SGG Energi Prima begins to supply us will depend on our acquisitions. However, we have to targeted this [the supply] to star by year end or by next year,? Erizal said.
Dwi said that Semen Gresik would also reduce the need for high calorie coals in the next two years. About 30 percent of the company?s demands for coal are in high calorie products, while the remaining 70 percent are low and medium calories.
?We are thinking of how to control operational costs to make the company maintain profits. The price for high calorie coals is more expensive, at about Rp 300,000 per ton compared to low and medium calorie coals. We will reduce consumption of high calorie coals,? Dwi said.(*)