Indonesia S.Kalimantan gets coal trucks off public roads

Indonesia S.Kalimantan gets coal trucks off public roads
Mon Apr 27, 2009 7:09am EDT

JAKARTA, April 27 (Reuters) - A local government in one of Indonesia's top coal-producing areas has banned coal and palm oil firms from using public roads because of the damage done by the trucks, a move which could increase costs for smaller producers. The governor of South Kalimantan province, which accounts for around 36 percent of Indonesia's total coal production, said the new regulation was intended to reduce the damage to key infrastructure and would come into effect in July.

The ban is unlikely to affect shipments from big coal producers in the area -- including PT Adaro Energy Tbk (ADRO.JK) and PT Arutmin, a unit of Indonesia's largest coal producer PT Bumi Resources Tbk (BUMI.JK) -- as they have their own hauling roads, according to Supriatna Suhala, executive director of Indonesia Coal Association.

"It will affect small miners. They may either have to declare force majeur, incur extra costs by building roads, or use small trucks which are suitable for public roads," Suhala said.

"Ideally, all miners should have their own roads because they use heavy machinery which could damage public roads," he said.

Many of the public roads in South Kalimantan have been badly damaged, as they were not intended for heavy use by trucks carrying coal and oil palm fruit and weighing tens of tonnes.

Coal miners and palm oil planters must build their own roads linking the mines and plantations to the nearest river ports by the end of July, Governor Rudy Ariffin said.

"If their roads come across public roads, they will have to build an underpass," Ariffin told Reuters in Jakarta after a meeting with legislators.

"Companies are now working to build their own roads. Hopefully, the roads can be used to transport mining products and agriculture produce by July," he said.

Indonesia is expected to produce 230 million tonnes of coal this year. (Writing by Fitri Wulandari; Editing by Sara Webb)





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