Banpu’s Indo Tambang may backtrack on plan to join 35,000MW programme
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JAKARTA - Coal producer PT Indo Tambangraya Megah (ITM), controlled by Banpu Thailand, is reviewing its plan to build a coal-based power plant to support the government’s 35,000-megawatt electricity project.
Marketing director ITM Jusnan Ruslan said the government's programme insisted on low-calorie coal to reduce electricity tariffs. However, ITM produces medium- and high-calorie coal of which 87 percent is exported to other countries.
"We will look into it. If the programme is good, we will acquire a mining site for low-calorie coal," Jusnan told thejakartapost.com on Monday.
The 35,000-megawatt project is expected to use domestic coal amid sluggish global demand as a result of low oil prices. However, coal producers have complained about the sales price, prompting the Indonesian Coal Mining Association (APBI) to demand "insurance premiums" to offset the risk of future price drops.
"I’m not sure about the insurance. But regarding the price, we’d better leave it to the market," Jusnan said.
He explained that the biggest buyers for ITM’s coal were India, Japan, and China, the three countries together accounting for 52.84 percent of ITM's sales.
Last year, India bought 5.4 million tons (19.15 percent) of the 28.2 million tons of coal sold in total. Japan and China bought 5.1 million tons (18.09 percent) and 4.4 million ton (15.6 percent), respectively.
"Asia is still our biggest market. India is growing fast and China's demand is still good, while in Japan most of the power plants are still using coal. Japan is our premium market," Jusnan said.
