Reuters reported that Indonesia state owned electricity firm PT Perusahaan Listrik Negara would go into partnership with coal mining firms, financing their mine development in return for securing supplies.

Mr Dahlan Iskan PLN president director said that PLN would offer the funding for the mining, and in exchange would provide a secure market for the coal by offering to buy it in an offtake agreement.

He said that "There are many investors who have coal mining permits but they can't mine the coal as it needs substantial financing. When they can mine the coal, they may not have the market. PLN has a huge market for them. So we offer to work with them."
Mr Iskan said as part of the agreement, the state utility would hire mining contractors to carry out the mining, and would sell the coal to its own power plants, giving the mining companies a share of the profit.

PLN is under pressure to ramp up capacity and modernize its plants, and has switched to natural gas and coal to meet demand and cut consumption of crude oil.

The firm used 21.9 million tonnes of coal in 2009, double the 10.69 million tonnes used in 2007.

(Sourced from Reuters)