The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/632337
16 | ASIA Miner | Volume 13 • Issue 1 | 2016 Indonesia DESPITE depressed coal industry conditions, state-owned coal producer PT Tambang Batubara Bukit Asam (Persero) continues to seek growth through acquisitions and extra production. Along with increasing domestic needs, the company says demand in South East Asia as well as India, Japan and Taiwan will remain solid, as coal is far cheaper than other energy sources. Bukit Asam president director Milawarma said that the compa- ny had opportunity for expansion because companies with high- est costs would be forced to leave the industry, particularly smaller players with limited scope to improve proftability. It has shown its intentions in 2015 with the acquisition of two coal-related companies for US$36 million and a stake in Australian coal technology company Ignite Energy Resources for A$30 million. Coal prices have been declining since 2011 and this has been exacerbated by China's economic slowdown. Outlook for a recov- ery remains bleak while producers face increasing pressure from environmental groups opposed to coal production owing to its en- vironmental impacts. However, Bukit Asam, which sells more than half of its coal do- mestically, aims to produce 60 million tonnes annually by 2020, about three times more than current levels. The company's fnance director Achmad Sudarto said the target was realistic owing to the government's plans to add 35,000 megawatts (MW) of electrical capacity by 2019. He said Bukit Asam was doing due diligence on other acquisition targets within Indonesia and further afeld, and aimed to buy majority stakes in them. The company's major Indonesian operation was in the middle of South Sumatra and development was hindered by lack of infrastructure, which is "why we are looking at acquisitions outside Sumatra". A joint venture between Bukit Asam and a subsidiary of China's state-owned China Huadian has kicked off construction of the 1240MW coal-fred Sumsel 8 power plant at Tanjung Enim, near Bukit Asam's mine. The company plans to supply 5.4 million tonnes of coal annually to the plant, which will cost US$1.6 billion and is expected to begin operations by 2019. The company is also planning a 3x600MW plant, Sumsel 9&10 in the region. This is expected to consume up to 8.1 million tonnes of coal per year, also from Bukit Asam's mine. Investment in a third new coal-fred plant in Peranap Riau, Suma- tra, is estimated at US$2.4 billion. It is planned to generate 800- 1200MW by 2020 and consume about 8.4 million tonnes annually. THE Wetar Copper Project expansion on Wetar Island remains on track for commissioning and frst production during the current quar- ter. Finders Resources says the expansion project will increase an- nual copper cathode capacity from 3000 tonnes to 25,000 tonnes. In its September quarterly report, Finders said that mine construc- tion and related activities advanced in accordance with expecta- tions. "Earthmoving activity increased following mobilisation of a second earthmoving feet, with Stormwater Pond Three advancing to the foor of the underdrainage. Once the underdrainage is in- stalled, the dam walls will be shaped and compacted to allow in- stallation of the liner." The frst cell of the KKV Heap Leach Pad, the largest pad adja- cent to the 25,000 tonne SX-EW plant site, was lined and the new crusher was crushing the initial bedding layer. Finders said earthworks at Stormwater Pond Two had been com- pleted and the pond was being lined. "Once completed the pumps and necessary pipework will be installed and the pond will be ready for use. The 25,000 tonne plant raffnate pond adjacent to the plant site is lined and ready for use. "The fnal cut on the neutralisation pad is being undertaken prior to handover for commencement of concrete work. The cut required widening of the main haul road to allow the pad to be enlarged. During excavation of the open pit haul ramp onto the main access ramp a small quantity of additional ore was excavated from outside the ore reserve. "Pouring of concrete to establish foundations for the 25,000 tonne plant continued. Tank refurbishment has been completed on a number of the major tanks. The fbreglass contractor's focus has turned to construction of the new settler and the electrolyte recircu- lation tank. Refurbishment of the EW cells continues. "The fbreglass contractor completed the refurbishment of the SX settler tanks and the lifting of these tanks into position on the SX site commenced during the quarter." During the September quarter the project produced 425 tonnes of copper cathode from the 3000 tonne plant and sold 406 tonnes at an average price of US$2.38 per pound. Finders' managing director Barry Cahill said, "It is pleasing to re- port the signifcant progress made on the expansion project, which remains on budget and on track for production in Q1 2016. During the December quarter, the expansion project will really take shape as we advance into an intensive construction phase on the 25,000 tonne plant." Acquisition plans for Bukit Asam The site of the 25,000 tonnes per annum SX-EW plant at Finders Resourc- es' Wetar Copper Project. Wetar expansion on track for production