Strong domestic demand may limit PTBA's coal exports

Strong domestic demand for coal from State coal miner PT Tambang Batubara Bukit Asam may limit its coal supply for overseas market, said the company's President Director on Wednesday.

State utility firm PT Perusahaan Listrik Negara has asked for 1.5 million tonnes of additional coal to be supplied from October 2010 until 2011, said Sukrisno.

"We cannot increase supply for exports because we have to fulfill supply contract with PLN. But we can still supply Japan's market," he said.

PTBA has huge coal deposit but production has been constrained by the lack of transportation. PTBA plans to increase its ownership in Bukit Asam Transpacific Railway (BATR), which will soon begin coal railway project in South Sumatra, to 30 percent from the present 10 percent.

Currently, PTBA has a 10-percent stake in BATR, with PT Rajawali Corporation holding 80 percent and Chinese company China Railway Engineering the remaining 10 percent.

As reported earlier BATR will build a 308 kilometer long railway system which will be used to transport coal from PTBA?s coal mine in Bangko Tengah, South Sumatra province to a coal terminal in Lampung province. The US$1.6 billion project will be financed by loans from a number of Chinese banks. When the project is completed, PTBA can increase its production to 20 million tonnes a year. (Godang)