Bumi raises 2005 coal price target

Bumi raises 2005 coal price target

Bloomberg, Jakarta

PT Bumi Resources, Indonesia's biggest coal exporter, said the
average price of coal that it sells in 2005 may rise almost 9
percent from this year as China and India boost purchases.

The company raised its 2005 average price forecast for thermal
coal, used by power plants, to US$38 a metric ton next year, from
$35 this year, Bumi Resources Finance Director Eddie Soebari said
in a telephone interview after a shareholders' meeting. The
company cut its 2004 production estimate, he said.

Coal prices have jumped as China, the world's biggest
producer, reduced exports of the fuel to feed surging demand from
its steelmakers and electricity companies. Benchmark contract
prices for thermal coal may rise 10 percent to $49.50 a ton next
year, Merrill Lynch & Co. forecast in June.

"Demand is still high, especially from China," Soebari said in
Jakarta. "We are also seeing power plant growth in India and the
Philippines."

Bumi Resources' 2004 average price of $35 a ton is higher than
its average selling price of between $31 and $32 a ton earlier
this year. Last year, the company's average coal price was $25.50
a ton and production cost was about $19 a ton.

Bumi Resources had profit of $100 million from January to
September, Soebari said. The company didn't give a comparable
figure in dollars for a year earlier as earnings then were
denominated in rupiah.

It earned Rp 65 billion ($7 million) between January and
September 2003, it said in a statement last year. The company
maintained its full-year profit forecast at $137 million, while
sales are expected to reach about $1.2 billion, Soebari told
reporters earlier.

Bumi Resources lowered its 2004 coal output estimate to 40
million tons from 43 million tons, Soebari said. He forecast 2005
production to rise 13 percent to 45 million tons. Last year, it
produced 29 million tons of coal.

"We understand there will be heavier rains and will create
difficulty in getting equipment to the mines," he said.

The company's output rose after it bought PT Kaltim Prima
Coal, which has mines in East Kalimantan, and PT Arutmin
Indonesia, which mines coal in South Kalimantan.

Kaltim Prima operates mines in three areas of East Kalimantan
-- Prima, Pinang and Melawan. The mines have estimated coal
reserves of 366 million tons.

Kaltim Prima is planning to start commercial production at a
new mine in Bengalon in East Kalimantan, which has estimated
reserves of 158 million tons, according to the company.

Bumi Resources sells its coal to customers in China, India,
Taiwan, Hong Kong, Malaysia, Japan and the U.S.