Press Release

BUKIT ASAM will attach value to the coal it produces. Strategy to answer the challenges of the times. 

It is okay for people to say that the coal industry is already in a sunset position. It means that the industry has reached its peak. However, that does not imply that Bukit Asam is a part of Indonesia’s coal mining industry history. “We are a going concern company. This means that Bukit Asam will continue to live for a long time,” said Suryo Eko Hadianto, President Director of Bukit Asam.

Suryo Eko’s assertiveness, who has not yet taken his position for a month, is not making it up. Look at the statistics from Statista. In 2021, the number of Coal-fired Power Plants is still huge. In mainland China, there are 1,082 ones, followed by India, the United States, Japan, Russia, and Indonesia, each with 281, 252, 87, 85, and 77 coal-fired power plants. Statista is a company that specializes in market and consumer data. The company says its platform contains more than 1,000,000 statistics on more than 80,000 topics from more than 22,500 sources and 170 different industries. “We still really need cheap energy sources. And, that is coal,” said Suryo Eko Hadianto.

Indeed, in recent years the challenge for coal was formidable. The massive clean energy campaign of clean energy advocates has eroded the market for fossil fuels, including coal. Then, the Covid-19 pandemic in the last two years has also increasingly put pressure on the coal market. But, as it is said, whatever the situation, the world still needs cheap energy.

As the poet John Milton put it, every cloud has a silver lining there is always an optimistic situation in every unpleasant situation. Just look, Indonesia is currently entering a period of economic recovery, although there was still a contraction in the first quarter. However, overall it is better than the last quarter of last year. The government also has several programs to encourage economic growth, such as accelerating the National Economic Recovery (Pemulihan Ekonomi Nasional, PEN) stimulus.

This condition is a positive signal for Bukit Asam to improve its performance. Bukit Asam’s performance and performance in the first quarter was still positive with a profit of Rp 500.5 billion. Then, Bukit Asam continues to make efficiency measures during the pandemic period; this is reflected in the administrative and general costs, which fell 19 percent compared to the first quarter of 2020. The efficiency measures taken did not prevent the company from continuing to grow.

The total amount of the company’s assets increased by 2 percent in just three months, from Rp 24.1 trillion in 2020 to Rp 24.5 trillion at the end of the first quarter of 2021. The assets increase is in line with a decrease in liabilities from Rp 7.1 trillion at the end of the year. In 2020 to Rp. 6.9 trillion at the end of the first quarter of 2021. These positive signals, accompanied by the increase in coal prices, have made Bukit Asam optimistic about this year’s performance.

The good news is that the government has raised the national coal production target from 550 million tons to 625 million tons this year. Of course, this is an excellent opportunity for the company. Bukit Asam will also increase production this year by at least 30 million tons. “We can increase up to 36 million tons,” said Suryo Eko Hadianto.

According to Suryo Eko Hadianto, the demand for coal in the domestic market is currently improving. Bukit Asam has secured new customers in the domestic market from an alumina refinery(smelter) in Bintan Island. Then, he added, all of the coal allocations for export have been booked. Like a shop, this has been chased by buyers. “Bukit Asam just sits back and makes a strategy on how to increase the bargaining value to get the best price,” he said.

Furthermore, Suryo Eko Hadianto said that Bukit Asam also plans to expand the market, including the Philippines, because of the short distance and good value for Bukit Asam. “Sales to the Philippines have increased significantly compared to last year; even the Philippines is now the 4th largest market for PTBA. “We record in our financial reports that sales to the Philippines rose by 397% in the first quarter of this year compared to the first quarter of last year,” he said.

Still, the better market conditions do not make Bukit Asam ignorant to the increasingly intense world demands for the use of clean energy or new renewable energy (EBT). “Bukit Asam must be able to answer the challenges of the times. The world is increasingly concerned with environmental issues. Therefore, Bukit Asam will also enter into the EBT sector to realize one of its visions,” Suryo Eko Hadianto emphasized. “Bukit Asam will be branded not only as a coal company but as a green energy company. There is a dedicated responsibility towards the development of EBT,” said Suryo Eko Hadianto. “This is not just a discourse. We have started working on the Solar Power Plant (Pembangkit

Listrik Tenaga Surya, PLTS) project,” he explained. “Bukit Asam does not only sold coal as is, yet it has environmental value. It is our strategy to face the market related to environmental issues and mining activities.”

Suryo Eko Hadianto explained that Bukit Asam continues to roll out the downstream project. For example, the South Sumatra Mine Mouth 8 coal-fired power plant project has reached 75.6 percent progress. “This prestigious US$ 1.6 billion project is planned to operate in March 2022. Later, the PLTU, which is part of the 35,000 megawatts (MW) electricity program, will absorb around 5.4 million tons of coal produced by Bukit Asam.”

Bukit Asam also plans to work on solar power plant development projects in post-mining land owned by the company in Ombilin, West Sumatra, and Tanjung Enim, South Sumatra. Each post-mining land will have solar power plants installed with a capacity of up to 200 MW. “Currently, PLTS is in the discussion stage with PLN to become an independent power producer (IPP),” said Suryo Eko Hadianto.

According to Suryo Eko Hadianto, one reason for choosing the solar power plants segment is that Bukit Asam already has post-mining lands. We can use them. Of course, this can reduce land costs because PLTS requires a large enough area. “This ex-mining lands must have optimal benefits because the cost of land acquisition is quite expensive for other companies that want to enter the PLTS segment. However, there is no land cost for Bukit Asam. It is why we choose solar power plants, “he said. In addition, the gasification project that converts coal into dimethyl ether (DME) is also continuing.

The cooperation agreement between Bukit Asam, PT Pertamina, and Air Products Chemical Inc has also been signed on February 11, 2021, and currently, the parties are in the process of completing another agreement. Later, this project will assist the government in reducing imports of liquefied petroleum gas (LPG). Bukit Asam has a mined coal reserves of 3.33 billion tons and resources of 8.17 billion tons for information. In addition to boosting production and sales, the availability of coal also guarantees business diversification through coal downstream. “I believe that the people of Bukit Asam will be able to answer the challenges of the times. I believe that the people of Bukit Asam have high integrity and willingness to work,” said Suryo Eko Hadianto. ■

Source: Beyond Coal Magazine May 2021