Bumi Resources to increase coal output by 40%
Bumi Resources to increase coal output by 40%
Rendi A. Witular, The Jakarta Post, Jakarta
Publicly listed PT Bumi Resources, the country's largest coal
producer, said over the weekend that it had set a target of
increased coal output at around 40 percent this year, taking
advantage of a rise in global coal prices.
Bumi finance director Eddie J. Soebari told The Jakarta Post
that the company was planning to produce around 43 million tons,
up from 30.6 million tons last year.
He said that about 25 million tons of the company's total coal
production this year would be derived from its newly acquired
subsidiary PT Kaltim Prima Coal (KPC), and the remaining 18
million tons from its other unit PT Arutmin Indonesia.
"The increase in our production is aimed at meeting demand
from several countries who previously relied on China, and also
to take advantage of the increase in global coal prices, which we
expect to soar by 20 percent this year," said Eddie.
Bumi has estimated that coal prices this year could reach an
average of around US$35 to $38 per ton for high quality coal.
Indonesian coal producers will benefit by the decision from
China, the world's largest producer and consumer of coal, which
has decided to limit its coal exports this year due to a serious
coal shortage at home.
China needs coal for 70 percent of its power plants, expected
to consume at least 900 million tons of coal this year.
Due to the shrinking coal supply from China, several countries
such as Japan, South Korea, Taiwan and India have been seriously
hurt, not only in terms of supply but also in the increasing
price of coal due to the limited supply.
Bumi said that it was expecting to plug the shortage of coal
in Japan, South Korea and in several eastern European countries
this year.
Elsewhere, Bumi head of investor relations Martinus Peter said
that the company's sales revenue was projected to reach $1.08
billion this year, up from an estimated of $704 million last
year.
Bumi becomes the country's largest coal producer after it
acquired KPC shares from Anglo-Australian mining firm Rio Tinto
and Anglo-American energy giant BP for $500 million last year.
Rio Tinto and BP each own a 50 percent stake in KPC.
KPC operates a huge coal mining site in Sangatta, Kutai Timur
regency, in East Kalimantan. Some 96 percent of the company's
high quality coal is exported to international markets,
generating around $450 million in revenue each year.
According to the Indonesian Coal Mining Association (APBI),
citing the Business Monitor International, coal production from
Indonesia in 2004 is estimated at around 119.7 million tons, up
from 109.3 tons in 2003 and 103 million tons in 2002.
Seventy percent of Indonesia's coal production goes toward
export.