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span class="caption" style="width: 398px;">Across dust and sand: Excavators are in operation at PT Berau Coal's Binungan mine in East Kalimantan. The company expects to produce 20 million tons of coal this year.Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees India as a potential market for the company’s low-calorie coal.

Berau president director Rosan Perkasa Roeslani said in Jakarta on Wednesday that coal exports to India, especially those of low-calorie, would be further increased to meet the growing demand from the South Asian country’s power plants.

Speaking during the company’s public expose, Rosan said that a market diversification into India would be needed to maintain the company’s export growth. “We want to diversify our market. Currently, most of our products are exported to China. We want to increase our sales to India starting from next year,” Rosan said.

BRAU sold 8.6 percent, or about 1.29 million metric tons, of its total sales of 15 million metric tons of coal produced up to the third quarter to India.

According to company data, China remains BRAU’s primary export market, with sales accounting for 43.9 percent of its total coal production. The figures also show that the company sells 17.4 percent of its coal to Taiwan, 11.2 percent to South Korea and about 0.4 percent to Japan. BRAU only sells 14 percent of its coal production on the domestic market. Most buyers of BRAU’s coal are power plants.

Rosan declined to reveal how much the company aimed to sell to India. “India is a market for our low calorie coal coming from the Lati mining site,” Rosan said.

BRAU’s main products are Mahoni coal with a calorific value of 5,500 kcal/kg, Mahoni-B with a calorific value of 5,300 kcal/kg, Agathis with a calorific value of 5,100 kcal/kg and Sungkai with a calorific value of 5,000 kcal/kg.

Currently, BRAU owns five mining locations in East Kalimantan. The concessions are Lati, Binungan I to VII, Binungan Prapatan, Binungan Kelay and Sambarata. The concessions’ cumulative area is 118,400 hectares.

Rosan said that BRAU’s average price by September stood at US$80 per metric ton of coal, a 33 percent increase from $60 in the same period last year.

“For the whole year, we estimate the average price will be $81. For next year, we predict conservatively that the average price will slightly decline to $80,” Rosan said.

The increasing price of coal contributed to BRAU’s growing net profit to $112 million in the first nine months of this year, surging 240 percent from $33 million in the same period last year.

“We hope that BRAU will book up to $600 in EBITDA [earnings before tax and amortization] next year,” Rosan said. BRAU’s EBITDA stood at $435 million as of September, surging 77 percent from $245 million year-on-year.

According to Rosan, BRAU expects to produce 20 million metric tons of coal by the end of the year. “We aim to reach production of 23 million next year and 30 million by 2014,” Rosan said.

BRAU’s director of finance John Ramos said that his company would allocate $140 million to $160 million in capital expenditure for 2012. Rosan said that the expenditure would be used to build infrastructure to boost coal production. “We have no plans for acquisition,” Rosan said.

The company said earlier that it would begin exploration at the Binungan Block 1 next year to meet the production target. The Binungan Block 1, with estimated reserves of 10 million tons, is expected to produce 500,000 tons in 2012. (rcf)