The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/830355
14 | ASIA Miner | Volume 14 • Issue 2 | 2017 Indonesia STATE-OWNED coal miner PT Bukit Asam aims to increase production by 30% in 2017 to 27.3 million tonnes with most des- tined for the domestic market. This will sup- port the government's ambition of providing more electricity, which will be largely fulfilled by building coal-fired power stations. In a 58%:42% split, around 15.9 million tonnes will be allocated to the local market and 11.4 million tonnes for export. Comple- tion of a double track railway from Prabu- mulih station to Bukit Asam's Tanjung Enim mine in South Sumatra will help the compa- ny achieve its aim. The company has also been working with state-controlled train operator Kereta Api In- donesia (KAI) to ship more production from Tanjung Enim to Tarahan Port and Kertapati Port in Palembang. In 2016 the amount of Bukit Asam coal transported on KAI trains increased by 12.2% to 17.72 million tonnes and this year, the miner is targeting 21.7 mil- lion tonnes with KAI. The company has also been supporting the government's power plans by investing in coal-fired power plants in various regions, including facilities in Mulut Tambang Banko Tengah, South Sumatra and East Halma- PT BUMI Resources has an optimistic outlook for its coal operations in 2017 with sales expected to be 5% to 7% higher than last year while its average selling price is expected to be at least 30% above 2016 levels. The company expected 75% of its sales volume to be committed by the end of March. Bumi is one of the world's largest coal exporters with its KPC mine being the world's largest export coal mine. It is the largest thermal coal producer in Indonesia with KPC and Arutmin commanding a dominant share of Indonesian coal production in 2016. Total coal production in 2016 was 86.5 million tonnes, up from 81.2 million in 2015 and 84 million in 2014. During the December quarter coal mined increased 12.3% to 23.8 million tonnes from 21.2 million in the same quarter of 2015. Arutmin's quarterly production increased 37.2% to 9 million tonnes from 6.5 million and KPC production increased 1.2% to 14.9 million tonnes from 14.7 million. The sales volume increased 11% from 79.3 million tonnes in 2015 to 87.7 million in 2016. Arutmin sales increased by 15.3% from 24.8 million to 28.6 million tonnes in 2016 and KP sales increased by 8.4% from 54.6 million to 59.1 million tonnes. In the December quarter coal sales increased by 10.2% to 23.1 million tonnes compared to the same quarter of 2015. Arutmin sales increased 35.5% to 8.4 million tonnes from 6.2 million while KPC sales were steady at 14.7 million tonnes. The production cash cost decreased by 12% from US$30.2 per ton to US$27 per ton in 2016. Bumi says this was due to fuel and spare procurement efficiencies, lower mining operating costs and a higher production rate at an Arutmin mine. The strip ratio reduced by 3.7% to 6.9 during 2016 compared with 7.1 in 2015 due to a reduction of 4.1% at KPC. The company has 2.2 billion tonnes of marketable coal reserves and 12.4 billion tonnes of coal resources with high potential for re- serves expansion as KPC has only been partially explored. In 2017 the company expects to sell more than 40.866 million tonnes domestically, 26.951 million tonnes to India, 10.8 million to Japan, 5.84 million to the Philippines, 1.55 million to Malaysia, 1.338 million to China and 1.774 million to Taiwan. Bumi optimistic for coal in 2017 The Bukit Asam coal terminal at Tarahan Port in South Sumatra. Bukit Asam to lift production 30% hera, North Maluku. "We are involved in several tenders with (state-owned electricity firm) PLN for power projects outside Sumatra and Java with a total capacity of 800MW. I believe we can win at least 50% of the tenders," Bukit Asam finance director Achmad Sudarto said. The company achieved an operating profit of Rp2.53 trillion in 2016, a growth of 3% com- pared to Rp2.47 trillion in 2015. The company has optimised its mining system with stripping ratio control (SR), site area transportation dis- tances and mining plan optimisation. Domestic sales rose 22% to 12.3 million tonnes, compared to 10.1 million the previ- ous year while exports amounted to 8.5 mil- lion tonnes, accounting for 41% of the total. Bukit Asam has proven coal reserves of 3.3 billion tonnes, 2.7 billion of which are in South Sumatra and primarily at Tanjung Enim and Lahat mines. The company has allocated Rp5 trillion (US$373.83 million) to finance expansion this year. About 50 to 60% will be used for various development projects, including acquisi- tion of new coal reserves, with 10% for operations and the rest for the infrastruc- ture development.