Reuters reported that Indonesian coal miner PT Tambang Batubara Bukit Asam Tbk PTBA.JKis planning to improve coal deliveries with new infrastructure projects worth a combined USD 1.8 billion.

As per report ageing infrastructure has hampered Bukit Asam's ability to deliver coal to its customers, who include the state electricity firm. Bukit Asam with a market value of USD 2.9 billion said that it will upgrade the existing railway linking its coal mine in Sumatra to the port and will build a new railway in the same area.

Mr Sukrisno president director of Bukit Asam said that the firm plans to form a joint venture with PT Kereta Api Indonesia to upgrade the infrastructure by improving stations, coaches, bridges and tracks. He told Reuters that "PT KA (Kereta Api) and PT BA (Bukit Asam) will work together to improve the infrastructure in a bid to raise the company's annual capacity to transport coal to 20 million tonnes by 2012.”

Bukit Asam produced 8.5 million tonnes of coal in 2007 and wants to increase its production to 9.3 million in 2008. It estimated that upgrading the railway would cost USD 734 million and could be funded out of cashflow or using bank loans. The Indonesian coal miner will team up with China Railways Engineering and PT Trans Pacific to build a second railway line and a port in Bandar Lampung on the southern tip of Sumatra.

The project, worth USD 1.1 billion, will increase its coal transport capacity by a further 20 million tonnes by 2011. Work on the project will start at the end of this year or early next year.