Bukit Asam Seeking Partners in Power Plant

30 November, 2012 | Source: The Jakarta Globe

State-controlled coal miner Tambang Batu Bara Bukit Asam is seeking foreign partners to help it construct a $2.25 billion coal-fired power plant project in South Sumatra.

“We hope that negotiation with potential foreign partners can be completed in December this year,” said Milawarma, the president director of Bukit Asam. “With regards to ownership proportion, it is still being negotiated.”

The plant, which will have three 600 megawatt generators, will be 70 percent financed by loans and the remainder by the sale of equity in the planned joint venture.

Construction for the plant is estimated to take 36 months to complete, and the plant will consume around 8 million to 10 million metric tons of coal per year.

Bukit Asam said that it had set up in September a joint-venture company called Huadian Bukit Asam Power to build two 620-megawatt coal-fired power plants in Tanjung Enim, South Sumatra.

Bukit Asam has a 45 percent stake in this joint venture and will supply the power plant with 5.4 million to 6 million tons of coal per year for 25 years.

Bukit Asam, through its subsidiary Bukit Pembangkit Innovative, is also constructing a coal-fired power plant with two 110 MW generators in Banjarsari, which is about 200 kilometers from Palembang, the capital of South Sumatra.

Bukit Asam will supply as much as 1.5 million metric tons to supply the Banjarsari plant from 2014, when it starts operating.

In its effort to ramp up production, Bukit Asam plans to acquire a concession on small mines that produce low-calorie coal next year.

Milawarma declined to reveal the investment for the acquisition.

For 2013, Bukit Asam has set aside capital expenditure at Rp 1.5 trillion to Rp 2 trillion ($155 million to $207 million), which is higher than this year’s Rp 1.4 trillion.

Next year’s capital expenditure will be used for business expansion as well as for financing the acquisition of small mines.

“In line with the rising capex, we are targeting for an increase in production next year,”Milawarma said.

 

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