Indonesian company plans coal supply
By Wang Ying (China Daily)
Updated: 2005-11-26 05:41
Prima Multi Artha (PMA), an Indonesia-based trade and investment company, has
reached initial agreements with Beijing-based Datang International Power
Generation Co Ltd, to supply some 6 million tons of thermal coal to its three
power plants along the east coast.
"We are fully prepared on the Indonesia side, and will export coal to China
as soon as the talks are finalized," Bambang Wiranto, business development
director of PMA, told China Daily on Friday in an interview in Beijing.
The deal is the Indonesian firm's first attempt to cash in on China's surging
energy demands. According to the negotiation timetable, the first ship carrying
PMA's coal is expected to arrive in China by the end of this year, said Du
Jinping, deputy board director of Beijing Zhongxing Henghe Investment Consulting
Co Ltd, who is the business consultant to PMA's Chinese operations.
"We have signed letters of intent with Datang, and further long-term supply
contracts can be expected soon," Du told China Daily.
PMA said their competitiveness lies in cheap transportation costs and high
coal quality, notably its low sulphur content.
Since China's coal reserves are mostly located in the north of the country,
insufficient transportation has created a bottleneck in supplying coal-fired
power plants in economically-developed South China, keeping the prices high.
For example, shipping cost from Indonesia to Ningbo, a port in East China's
Zhejiang Province, will be 97.2 yuan (US$12) per ton of coal, while the
transportation cost from Datong, one of China's biggest coal-producing bases, to
Ningbo, which involves both rail and shipping, is at least 20 yuan (US$2.5)
more, said Du.
PMA expects to keep its coal price 2 per cent lower than that of domestic
Bai Fugui, manager of the fuel unit under Datang, told China Daily on Friday
that his company would be interested in the competitive price.
"Coal quality from the domestic producers is not fully guaranteed as well,"
Datang is now building three coal-fired power plants in Zhejiang , Guangdong
and Fujian provinces. These plants have a total capacity of 4,800 megawatts.
(China Daily 11/26/2005 page5)