Indonesia’s PT Tambang Batubara Bukit Asam (PTBA) expects coal sales to increase by 13% for 2009 on strong demand from the power sector. PTBA expects to sell 14.5 Mt of coal this year. About 12.7 Mt will come from its own production and it will purchase the remainder from other producers. PTBA sold 12.8 Mt in 2008. President Director Ir Sukrisno said “Coal demand globally is indeed slowing because of the financial crisis. But there will be new power plants coming on stream this year in the country and elsewhere. Three new power plants with total generating capacity of 1,000 MW are due to come onstream this year as part of the Indonesian Government’s crash program to add 10,000 MW of generating capacity through coal-fired power stations. Bukit Asam is to supply 3 Mt/y for the program, Sukrisno said.

PTBA also plans to increase coal production to 50 Mt/y within five to six years by developing new mines, embarking on railway projects and acquiring coal mines. The company has already said it would form a joint venture with state train operator PT Kereta Api Indonesia to upgrade existing rail links from its coal mines to a port on the southern tip of Sumatra. The South Sumatra Provincial Governor also planned a new rail project estimated to be worth $1 billion. Once the new provincial rail link is completed, PTBA would be able to deliver 20 Mt/y of coal to a port on the southeast side of Sumatra.

“When these railroads are complete, we would be able to produce 50 Mt,” Sukrisno said. South Sumatra–where PTBA’s mines located– has 47,000 Mt of coal reserves; half of Indonesia’s total of 93,400 Mt, according to figures from the energy and mines ministry.

South Sumatra’s coal production averages just 12 Mt/y due to poor transportation. The island of Kalimantan accounts for most of the coal produced in Indonesia. Sukrisno said the company was looking at the possible acquisition of two coal mines in Kalimantan and is currently undertaking due diligence.