Jakarta. State-controlled coal miner Tambang Batubara Bukit Asam began construction on Saturday of its long-delayed mine-mouth power plant in Muara Enim, South Sumatra.

The $1.6 billion plant, referred to as Bongko Tengah or Sumsel 8, will have total capacity of 1,240 megawatts once completed in 2018.

“It will need five to six million tons of coal per year, and all of it will come from our mine,” Milawarma, the Bukit Asam president director, said on Saturday.

Alex Noerdin, the governor of South Sumatra, kicked off the construction of the plant, which he said would make good use of the province’s rich coal reserves.

“The position of South Sumatra is strategic for becoming Indonesia’s energy powerhouse,” he said.