Indonesia's Bukit Asam targets Increase in its Coal Supplies to India in 2020

Indonesia's state-owned miner, Bukit Asam has targeted to produce about 30 MnT of coal in 2020 against 28.5 MnT of estimated coal production in 2019. Out of the total coal production forecast, about 60% which means around 18 MnT will be sold to state power utility PLN whereas 30% i.e. 9 MnT will be shipped overseas, mainly India while remaining 10% will be floated in the spot market, said company's management.

Indonesia is one of the key destinations of coal imports for India. During Jan-Nov of ongoing year 2019, India has imported about 109.5 MnT of coal from Indonesia, whereas last year i.e. in 2018 the country had imported about 106.7 MnT. Majority of coal imported from Indonesia is used by domestic power plants in India.

Apart from this, Bukit Asam has decided to scrap a plan to build a coal gasification project in Riau on Sumatra island and focus on plants it is building near its mine in Tanjung Enim, South Sumatra, for efficiency reasons.

PT Bukit Asam Tbk produces high calorie coal with 6,100 to 6,700 kcal / kg levels. The company has managed to record an increase in coal sales until September 2019 to 20.6 MnT, 10.7% higher from the same period the previous year. The sales increase was due to coal production increase to 21.6 MnT, 9.6% higher from the same period the previous year, as well as coal transportation capacity increase to 17.8 MnT, 4.7% higher compared to January to September 2018 period.

This coal sales increase has been attributed to the company's sales strategy by targeting coal exports to several countries such as India, Hong Kong, the Philippines and some other Asian countries, also targeting new export markets such as Japan and South Korea. Besides encouraging export sales to Asian countries, the Company also exported medium to high calorie coal to the premium market.

In the month of November, the company entered into a contract to supply 2 MnT of high-calorie coal to Taiwan in 2020. The company sends coal to one of the petrochemical companies, Formosa Plastics Group (FPG).