Indonesia’s UNTR plans downstream coal sector shift

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Indonesian coal mining services and heavy equipment company United Tractors (UNTR) is planning to diversify into the downstream coal and other sectors through its subsidiary Pama.

The company is looking at the possibility of expanding into the coal downstream and carbon capture technology sectors to protect its businesses against growing pressure against coal use, it said.

Several countries have been pushing for lower global coal use. A draft tax legislation is currently with the Indonesian legislative body and included in it is a provision for carbon taxation.

Pama said that one of the ways for it to offset the pressure on the industry is through diversification into the downstream coal industry and carbon capture, utilisation and storage. It said that carbon capture technology is one of the options that would allow Indonesia to continue to use coal, while staying true to its commitment to the global Paris agreement in reducing carbon emissions.

The company did not divulge any firm plans for the future but noted that coal is already in its sunset phase, despite the record-high prices the commodity is currently experiencing.

Pama is looking to slowly reduce its dependence on the coal sector as its primary source of revenue. UNTR currently has a coal concession in central Kalimantan but its reserves are expected to run out in 10-15 years. The company currently has no plans to acquire new mines to boost its coal reserves.

But Pama said that its coal mining services operations will remain a key business pillar. It recorded a 3pc increase in coal production in this year's first half through its mining contracts to 57.6mn t and is on track to hit its 2021 target of 115mn t. It expects its coal mining services arm to remain strong over the next few years as coal mining companies start to outsource operations to reduce costs.


By Antonio delos Reyes

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