State-controlled coal miner Bukit Asam expects to invest up to $900 million in Myanmar, building a number of projects there including a coal-fired power plant, its finance director said.

Achmad Sudarto said the Jakarta-based company had inked a deal with strategic partners in Myanmar, a country that is rapidly liberalizing its economy and opening up investment to foreign companies.

"We have engaged with a local company there, but we cannot reveal the name yet," he said on Thursday.

Achmad said that for the first phase of the deal, Bukit Asam would develop a 2×100-megawatt coal-fired power plant, before moving on to building another plant double the size.

He said the estimated the cost for the first plant was $350 million to $450 million. The second plant would cost up to $450 million to construct.

"The funding is there, whether from internal cash or bank loans from here [Indonesia] and from Myanmar," he said.

"Our coal will be exported to Myanmar, so it will be Bukit Asam's coal that will be used [in those power stations]."

In a separate development, the miner has set its capital expenditure for next year at $400 million, double this year's Rp 2.2 trillion ($193.6 million).

"Capex will be funded by internal cash," Achmad said, adding the spending would be for routine expenses to maintain the company's infrastructure.

The company, which was founded in 1950, suffered a 41 percent drop in earnings in the January-to-September period on lower sales and rising expenses.

Net income declined to Rp 1.2 trillion in the period from Rp 2.2 trillion a year earlier. Coal sales by volume increased 17 percent to 13.24 million metric tons, but the weaker price of the commodity weighed on overall sales by value.

Sales value declined 6.9 percent to Rp 8.12 trillion despite the export volume growing 36 percent to 7.02 million tons.

Bukit Asam's main export destinations are Taiwan (17 percent), India (14 percent), China (9 percent), Malaysia (8 percent), Japan (3 percent) and Vietnam (2 percent).

Bukit Asam also sells some of its coal output, of which the bulk is low-ranking - sub-bituminous and lignite - to the domestic market.

The company has also been involved in businesses beyond coal, tapping into industries that consume coal, such as electricity utilities.

Bukit Asam and China Huadian Corporation, a state-owned Chinese power company, have set up a joint venture company to operate a 2×620-megawatt coal-fired power plant in South Sumatra.

Bukit Asam shares, which began trading as PTBA in 2002, rose 4.3 percent to Rp 12,100 on the Indonesia Stock Exchange (IDX) on Thursday.

By Agustinus Tetiro

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