PNOC eyes coal contract in Indonesia

The state-owned Philippine National Oil Co. (PNOC) is negotiating a coal mining contract in Indonesia, a ranking company official said.

"One of the new developments is our plan and decision to mine coal in Indonesia," PNOC president and chief executive officer Eduardo Mañalac said in a a press conference.

Mañalac said they are in the process of firming up a mining contract with one of Indonesia’s coal mining companies.

"We are currently undergoing negotiations with PT Putra Asyano Mutiara Timur to develop mine and sell coal from its Ampah coal concession located in central Kalimantan, Indonesia," he said.

Initially, he said PNOC has confirmed 12.5 metric tons of high quality coal reserves over a 300-hectare area from the 5,000-hectare Ampah concession.

Upon completion of all development work, he said PNOC plans to start full mining operation by the first quarter of next year.

Mañalac said PNOC’s move to tap Indonesia as one of the potential partners for coal mining efforts is prompted by the Philippines’ need for a ready supply of coal.

"This effort would help us make sure, since this coal would be exported to the Philippines, that we have sufficient supply of coal. It’s not that we are not exploring here, it’s because the large coal reserves we have in the country are of low quality coal. We went there since we need high quality coal to blend with local coal," he said.

The Malangas coal, the kind of coal that is being produced here in the Philippines, is used to blend and raise the quality of the other coal.

"We would mine and sell the coal to be extracted and pay them instead. We would develop it when we prove it is economic, and then we would negotiate a development agreement," he said.

He said they expect to expand the coal mining venture with other Indonesian mining firms if the agreement with PT Putra becomes successful.

"The 12.5-million metric ton is just in the 300-hectare, not all of it would be sold as it would be used to be blended with local coal. Our customers are LaFarge, Holcim, and National Power Corp. (Napocor)," he said.