Prediction says that Indonesia, now being one of the oil exporting countries, will begin importing oil in the year 2004 as a direct consequence of the increasing domestic demand due to the growing manufacturing industry.

In fact, now more than ever, industry in the country is searching for alternative fuel. Industries whose production costs include high energy components are now switching from oil to more economical coal. Industries such a pulp and paper, cement, textiles and food producers are now discovering the enormous savings that can be achieved by switching their energy source from oil to coal. Any factory using a boiler to produce steam that is presently running on industrial diesel oil (IDO) can reduce its fuel bills by more than 50% by installing coal fired boiler.

It seems that the switch to coal is now inevitable as companies are trying to reduce their costs of production and as the price of oil continues to increase. Thus, the economic reasons to switch are obvious. With the availability of deposit and daily deliveries of coal as well as its technology, the choice to switch to coal is no longer an option but a necessity.

A series of experiments has been and is being done by the Mineral Technology Research and Development Centre to develop coal energy, particularly for the households and small-scale industries. Briquettes are now being introduced as household energy source.

Indonesia has an estimated 36,344.7 million tons coal reserves (the third largest in the world) scattering in the islands of Sumatra, Kalimantan, Java, Sulawesi and Irian Jaya.


Bukit Asam is a small hill in the area of coal mining in the village of Tanjung Enim, the District of Muara Enim, the Province of South Sumatra. PT. Tambang Batubara Bukit Asam (PTBA) was founded on March 2, 1980 as a state-owned company. To further improve the productivity and efficiency, the Government issued the Decree to merge the public company Tambang Batubara into PTBA, whereas PTBA itself previously was a production unit of Tambang Batubara. With the above merger as of 31st October 1990 PTBA has become the only state-owned company to process coal in Indonesia.

PTBA has two mining units, namely Tanjung Enim Mining Unit in South Sumatra and Ombilin unit in West Sumatra.

PTBA Tanjung Enim Mining Unit (UPT) in South Sumatra is divided into two areas of mining, namely Air Laya Mining and Non Air Laya Mining. Air Laya Mining (TAL) uses a continuous surface mining method with modern equipment. This operation can be controlled and handled from the Main Control Centre (MCC) by computerized system. The main heavy equipment is Bucket Wheel Excavate (BWE) to shovel coal and soil from the area, and conveyed to the Conveyor Dumping Point (CDP) to be divided, then the soil is sent to the waste dump spreaders while the coal is sent to the stockpile through belt conveyors. Non Air Laya Mining (NAL) utilizes a conventional method by using truck and shovel.

PTBA Ombilin Mining Unit is located in the municipality of Sawahlunto, the Province of West Sumatra which operates two minings an underground shaft mine and open mine. The underground mine uses long wall retreating system with semi-mechanized equipment operated manually and long wall fully mechanized equipment operated hydraulically, both are complemented with a continuously-operated coal shearer. The open mine uses the back filling system by truck and loader. The Ombilin mining supplies washing process to eliminate mud and dirt.

Besides, in line with the Government Decision No. 49 of 1981, the Indonesian Government has conducted joint operations with 11 private local/foreign contractors, namely:

West Sumatra Region

- PT. Allied Indo Coal, which started producing in 1987
- PT. Arutmin Indonesia, which started producing in 1990
- PT. Adaro Indonesia, which started producing in 1992, while PT. Chung Hua OMD is still conducting Evaluation of Feasibility Study.

East kalimantan Region

- PT. Kaltim Prima Coal, which started producing in 1990 and is under construction;
- PT. Utha Indonesia, which is still under construction;
- PT. Kideco jaya Agung, which started producing in 1992;
- PT. Berau Coal, which is still under construction and production preparation;
- PT. Multi Harapan Utama, which started producing in 1988;
- PT. Tanito Harum, which started producing in 1988;
- PT. Indominco Mandiri, which is still conducting exploration.

Besides, on August 15, 1994 PTBA signed joint operations with 19 new coal contractors based on Presidential Decree No. 21/1993.

Coal Production and Marketing

The Indonesianís coal deposit is 36,344.7 million tons. The production of coal in Indonesia has continuously increased from year to year which was shown at the end of Repelita V (1993) by 27.2 million tons compared to 8.7 million tons at the end of Repelita IV (1989). A number of 18.7 million tons was produced by joint operation contract, 7.4 million tons by PTBA and around 2 million tons by private operation. At the end of Repelita VI (1989) Indonesia is projected to produce 55.40 million tons by joint operation and 14.87 million tons by PTBA.

The Indonesianís coal production is used to meet domestic need and for export. In 1993/94 the coal used by domestic consumers was 8.5 million tons. They were used to support the steam-powered electric plant (PLTU) Suralaya I until VII PLTU Bukit Asam 1 until 4, PT Semen Padang, PT. Semen Gresik, PT. Semen Cibinong, PT. PUSRI, small industries, and household needs in the form of briquettes.

To meet the need of briquettes for households PTBA has developed new machine for producing briquettes. The machine was designed by the staff of PTBA themselves. By operating this machine it is planned to increase its production from 10 tons to 80 tons per day, which will be launched in December 1994.

In 1993/94, Indonesia exported 19 million tons of coal to Malaysia, Singapore, Philippines, Japan, Taiwan, Korea, and Bangladesh.

Coal from Tanjung Enim Unit is transported by freight trains to special coal ports of Kertapati (Palembang) and Tarahan (Bandar Lampung), while coal from Ombilin Mining Unit is transported by freight trains and trucks to special coal port of Teluk Bayur (Padang).

Back Filling

After coal mining operation finished, the soil removed from the mining area will be returned and regreened. The program of back filling and regreening the areas which has been mined is financed by PTBA. PTBA always pays a great attention to the environment, therefore, in 1992 this company got the Sahwali Award from the union of International NGO in the field of environment conservation which was given by the Dutch Minister of Environment.

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