Semen Padang to buy coal under long-term contract

West Sumatra-based cement producer Semen Padang plans to buy coal under a long-term contract to guarantee security of supply particularly during a difficult situation, the company?s financial director E. Irzal said as reported by Neraca on Monday.

Irzal said that Semen Padang which at present bought all of its coal needs from the spot market was still seeking for a producer which could sell its coal under a long-term contract.

?This is important to ensure the security of our coal supply. We hope we can find the long-term supplier next year,? he said, adding that buying coal from the spot market posed no problem at present. But if the coal price in international market surges, the supply in the local market will get scarcer, and this could cause a fatal problem,? he added.

At present Semen Padang needs about 800,000 tons of coal a year, or about 70,000 a month. The company buys most of its coal needs from coalmines in Sawah Lunto, West Sumatra and South Kalimantan. (*)