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Wednesday, 21 October 09
INDONESIA'S BUKIT ASAM GETS COAL RAILWAY APPROVAL


Reuters reported that, Indonesian state coal miner PT Tambang Batubara Bukit Asam Tbk said on Wednesday it had been given government approval to start development on a new rail line in South Sumatra that would boost coal output.

The transport ministry had approved in principle a 307 km (191 miles) rail line connecting its coal mine in Central Bangko in South Sumatra province to the port of Lampung, on the southern tip of Sumatra island, Bukit Asam said in a statement.

"The approval gives certainty to start the rail project," the firm said, adding the new railway would have the capacity to transport 20 million tonnes of coal a year.

Bukit Asam, Indonesia's third-largest coal miner by market value, expects to start operations of the new railway in 2013.

The rail project will be carried out by a joint-venture company between Bukit Asam, PT Transpacific Railway Infrastructure and China Railway Engineering Corporation.

Bukit Asam and China Railway Engineering Corporation each hold a 10 percent stake in the joint venture, while PT Transpacific Railway Infrastructure has an 80 percent stake.

China Railway will be appointed engineering, procurement and construction (EPC) contractor and operator of the project.

Based on a 2007 feasibility study, the project would cost $1.06 billion, of which about 30 percent will be financed using internal cash and 70 percent from loans.

Bukit Asam, which has market value of $3.58 billion, has said it plans to increase its coal production to 50 million tonnes a year within five to six years by buying new mines and developing the new railway project.

The firm has signed a 20-year contract with state train operator PT Kereta Api to transport coal from its mine in South Sumatra to the port. [ID:nJAK519103]

Bukit Asam expected its coal output to be 12 million tonnes this year, up from 11 million tonnes in 2008, helped by the increased use of trains to transport coal.
Source: Reuters



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