Titan suspends coal supply to Labuan power plant

Coal mining group PT Titan Mining Energy has suspended low-rank coal supply to state electricity firm PT Perusahaan Listrik Negara (PLN)?s Labuan power plant (2x200 MW)as it considered the PLN's price was too low.

Titan's chief of mining operations Roza P Putra told Petromindo.Com on Monday that the company is still negotiating new price with PLN.

Titan suspended the supply in May this year. It started coal supply to the Labuan power plant in June 2009 based a long-term contract, under which Titan is to supply 240,000 tons per annum to the power plant. Before the stoppage, Titan supplies PLN with around 20,000 tons per month, he said

Last year, PLN paid around Rp 390,000 (1US$ = Rp 9,000) per ton (CIF) for Titan's coal. Early this year, Titan asked to renegotiate the price, citing the rise in coal price on the international market. ?Titan suggests to use the government's monthly Coal Price Reference (HBA) to get a better price from PLN,? he said.

He also said that, starting early next year, Titan?s coal mine in West Kutai regency in East Kalimantan will commence commercial production. The mine is expected to produce around 600,000 tons of coal in the first year, he said.

After the operation of the West Kutai mine, the company will start coal production at its mine in East Kutai regency, East Kalimantan in the second semester of 2011 with production target of 600,000 tons in the first year.

Meanwhile, the firm has started production at its coal mines in Sumatra. The Sumatra coal mines are expected to produce a total of 1.5 million tons (MT) this year and ramp up the output to 3.5 MT next year, he said

The Sumatra mines include one located in North Bengkulu regency, Bengkulu province, which will produce 750,000-1MT this year and 2-2.5MT next year.

Another mine in Tebo regency, Jambi province, will produce 600,000 tons this year and ramp up the output to 1 MT in 2011.

The mine produces thermal coal and low CV coal. Low CV will be dedicated to domestic market and some to Indian market and as a blending coal, he said.

?So, next year, Titan can produce around 4.5-5.0 MT of coal,? he added.

The company has won 20-year 3.5 MTPA coal supply contract to PLN?s power plants in Suralaya, Labuan, Rembang, all in Java and Parit Baru, West Kalimantan. (denny)