Indonesian Mining Firm to Invest $900m in Myanmar Plants

Indonesia’s state-owned coal miner PT Tambang Batubara Bukit Asam plans to build steam power plants worth $900 million in Myanmar in the next few years and has invited a local partner to work on the project, according to Indonesian media reports, quoting the firm’s finance director Achmad Sudarto.
Sudarto said the Jakarta-based company had inked a deal with strategic partners in Myanmar, a country that is rapidly liberalising its economy and opening up investment to foreign companies.
“We have engaged with a local company there, but we cannot reveal the name yet,” he was quoted as saying in Jakarta Globe.
Achmad said that for the first phase of the deal, Bukit Asam would develop a 2×100-megawatt coal-fired power plant, before moving on to building another plant double the size.
He said the estimated the cost for the first plant was $350 million to $450 million. The second plant would cost up to $450 million to construct.
The finance director said the project would be funded through either internal cash or bank loans from Indonesia and Myanmar.
Bukit Asam’s coal will be used for those power stations as Bukit Asam will also be exporting coals to Myanmar.
The miner also plans to spend up to $400 million in capital expenditure in 2014, up from this year’s $192.86 million.
The company, which was founded in 1950, suffered a 41 percent drop in earnings in the January-to-September period on lower sales and rising expenses.
Bukit Asam’s main export destinations are Taiwan (17 percent), India (14 percent), China (9 percent), Malaysia (8 percent), Japan (3 percent) and Vietnam (2 percent).
Bukit Asam also sells some of its coal output, of which the bulk is low-ranking – sub-bituminous and lignite – to the domestic market.
The company has also been involved in businesses beyond coal, tapping into industries that consume coal, such as electricity utilities.