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Sumatra to boost Indonesian coal production

Already developed Kalimantan lies at the heart of Indonesia’s coal production, but all that could change as experts push Sumatra into the mix.

Speaking at the 18th annual Coaltrans Asia held in Bali, Indonesia, Ben Yohannes, Head of Regional Development Planning Board of South Sumatra said, “as more options become available for the world’s power needs, we are eager to exploit Sumatra’s coal as quickly as possible”.

The island is in close reach of Jakarta and lies along the country’s western border. Sumatra is roughly the same size as Kalimantan, but widespread exploration and development have yet to materialise.

Much of Sumatra’s coal deposits lie at the heart of the island, far away from coastal ports. Infrastructure is the main concern facing miners looking to exploit reserves, with protected forests and developed farming adding more layers of complexity.

According to statistics from the Mining and Energy Services, the region of South Sumatra has 47 million tons in coal reserves, around 48% of Sumatra’s total 62% of national reserves. In comparison, Kalimantan has only 29 million tons of reserves or 35% of the national store.

Tobias Maya, an exploration geologist with PT Danmar Explorindo also speaking at Coaltrans, surmised that: “Sumatra would become as big as Kalimantan in the future and much of the high-grade potential the island has to offer still needs to be explored”.

Several transportation links are in the planning stage. These include a trans-Sumatra railroad and toll-road connecting the island. In south Sumatra, two private railways, a roadway, and river transportation system aim to bring coal deposits to Tanjung Api-Api Industrial Zone.

Transforming Sumatra’s infrastructure has the potential to lure coal producers. However, Yohannes was quick to add: “there are so many plans for infrastructure, but they need to be implemented now.” Funding is a major concern, with private sources leading development.

Already operational state-owned PT Bukit Asam is responsible for a large amount of that funding. Paving the way in Sumatra’s coal production industry, the state-owned enterprise has three mining locations across the island. Director of Business Development for the company, Anung Dri Prasetya reinforced at Coaltrans that, “logistics had been their Achilles heel.”

Prasetya was optimistic though as he saw the costs greatly outweighing the benefits. He also reiterated the government’s plan to increase coal production as one of the major sources of Indonesia’s energy mix, with Sumatra playing a prominent role in reaching that target.

While welcoming potential miners to exploit the region, Yohannes was adamant this would not come at a cost to the environment. “Control our environment using technology that can protect it,” he said.

Sumatra’s role in Indonesian coal production seems certain. With plentiful reserves, infrastructure development is the last step needed. The logistics opportunities are immense and there is confidence in the region as once transportation develops, the island is set to be the next frontier in Indonesian coal production.

This content is provided by Coaltrans Conferences for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.

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