Indonesian coal producer Bukit Asam to raise 2025 capex

Market: Coal
15/04/25

Indonesian state-owned coal producer Bukit Asam has increased its 2025 capital expenditure (capex) plan from a year earlier, as it focuses on completing key projects to support its expansion plans.

The company said it has earmarked 7.2 trillion Indonesian rupiah ($428mn) as the capital expenditure (capex) plan for this year, a more than three-fold increase from last year's Rp2.35 trillion.

Bukit Asam will fund around 80pc of the capex via loans while the remainder will be from the company's own coffers. The company said that it is able to be more aggressive with loans since it has a healthy debt-to-equity ratio of 0.6.

The bulk of the capex will be used for the completion of the Tanjung Enim-Kramasan coal railway system, a key infrastructure project to allow the company to increase its coal production. The commercial operation of the railway project will boost the company's transportation capacity by another 20mn t/yr of coal.

Construction of the railway project started in 2023 with a target to operationalise the line in 2025, but the project ran into delays. Bukit Asam is now targeting to open the line by the third quarter of 2026. This will be in line with the company's long-term plan of boosting output to 100mn t/yr by 2030.

Bukit Asam is also increasing investments in its downstream project, in line with the government's push to develop the downstream coal industry. It has already partnered with Indonesia's National Research and Innovation Agency to develop artificial graphite sheets using Bukit Asam's coal. The pilot project has seen moderate success, but improvements are still needed to reach economic feasibility. Additional funds would help to improve conductivity and density to reach international standards, with the goal of commercial operations by 2028.

The project is important for Bukit Asam, as it sees an increase in usage for artificial graphite sheets, ahead with the rising popularity of electric vehicles that would make Li-ion battery parts manufacturing an attractive coal downstream avenue.

By Antonio delos Reyes

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