Indonesia's PT Bukit Asam plans to increase coal production 26 percent in 2017 to 24 million tonnes, the chief executive of the state-owned company said, amid improved prices and increasing demand for the fuel at home and abroad.
"We see Chinese and Indian demand increasing now, (and) new markets like the Philippines and Vietnam are starting to seek our coal," CEO Arviyan Arifin told Reuters in an interview on Monday. Arifin said he hoped prices remained stable at around $80 per tonne, noting that 2017 was off to a good start compared with the first quarter of 2016 when prices were around $50 per tonne.
"If demand is high, prices are good, we can invite investors to develop new logistics channels, or to increase our logistics capacity, so production can (improve)," he said. Last year Bukit Asam produced 19 million tonnes of coal. Other mines were also benefiting from better coal prices, Arifin said.
"(Small) mines that were dead have come back to life again," he said, referring to the recent government coal production target of 470 million tonnes for 2017. "You can see this in the field. Now that prices are at $80 maybe they're breaking even, or they're making a profit." Indonesia's domestic market typically absorbs around 60 percent of Bukit Asam's output, Arifin said, and several new power stations are expected to start operations in Indonesia this year.
By 2020, Bukit Asam plans to expand and develop around 1,500 km (932 miles) of rail infrastructure linking its Tanjung Enim mine to ports on the northern and southern coasts of Sumatra Island. Bukit Asam is working to transform itself into an energy company and hopes to develop seven power stations around Indonesia with a combined coal consumption of more than 30 million tonnes, among other initiatives to diversify its core business.
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