PT Titan Infra Energy is a company engaged in mining, energy infrastructure and logistics which focuses on developing infrastructure to support coal mining activities as its core business. The company is investing up to US$ 200 million to build a 110 km special road for coal transportation in South Sumatra.
Acquisition of the Servo mining road from PT Adaro Energy Tbk
PT Titan Infra Energy bought a coal transportation road called Servo from PT Adaro Energy Tbk in 2014. This road stretches across three districts, namely Lahat, Muara Enim, and Palembang. Originally built by PT Servo Infrastruktur before changing hands to Adaro, and then to Titan.
The company continues to strive to increase the capacity of coal transportation via this road. Currently, the maximum capacity of coal that can be transported via this road is 3 million tons per year, but this amount will be increased gradually to 6 million tons next year and will continue to increase until it reaches a maximum hauling capacity of 12 million tons per year.
Infrastructure Development to Overcome Coal Price Fluctuations
PT Titan Infra Energy has read the trend of declining coal commodity prices in the last few years. To overcome this, the company has developed supporting infrastructure such as ports and special coal transportation roads so that logistics costs are more efficient. This allows the company to continue to grow even though coal prices fluctuate.
Transformation from a Mining Company to an Energy and Logistics Infrastructure Company
The company has transformed from a mining company to an energy and logistics infrastructure company. This was done because PT Titan Infra Energy realized that it could not rely solely on mining. With broader infrastructure development, the company can expand its business in energy and logistics.
The 110 km Servo road is directly connected to Servo Port on the Musi River with a capacity of 12 Mtpa, which is also owned by Titan. From this port, coal is distributed to various power plants spread across Java. PT Titan Infra Energy also has other supporting infrastructure such as the Bengkulu Port in Kotabani with a capacity of 5 Mtpa and a 20 km special coal hauling road located in the same city.
Coal Supply Concession for PLN
Director of Compliance and External Affairs Taufik M. Ahmad explained that this supporting infrastructure was developed because the company supplies 3.2 million tonnes of coal to PLN per year. The concession lasted for 20 years since the contract was signed in 2006. “From there we realized that we needed roads, we needed ports. After building supporting infrastructure, we can save approximately 30% to 40%,” he said. He added that currently the contribution from logistics is greater than mining, namely 60:40. Expansion plans that will be carried out in the next few years will be more directed towards the development of logistics infrastructure and construction of power plants.