BRMS’ shares continue to drop
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Declining financial performance resulting from lower contributions from its subsidiary has placed further pressure on the shares of PT Bumi Resources Minerals (BRMS), a non-coal unit of coal mining giant PT Bumi Resources (BUMI).
Shares in BRMS closed at Rp 435 apiece at the end of the first trading session on Thursday. The price was a 7.78 percent drop compared with the closing price of Rp 450 a day earlier, underperforming the Indonesia Stock Exchange (IDX) mining index, which fell slightly by 0.76 percent. BRMS’ shares have fallen about 18 percent in a year to date.
In a published financial report, BRMS marked a business setback in the first half of the year with US$1.91 million in net profit, a massive 96 percent plunge compared to $52.13 million in the same period last year.
The company reaped higher revenue of $11.97 million during the January to June period, growing by about 55 percent compared to $7.69 million in the same period last year.
“The revenue pertains to the services rendered by the company’s subsidiary, Bumi Resources Japan Company Limited, and the Mitsubishi Corporation to market coal produced by PT Kaltim Prima Coal, a subsidiary of PT Bumi Resources [BRMS’ parent company],” BRMS said in the financial report.
BRMS has suffered losses from its subsidiary PT Newmont Nusa Tenggara (NNT), which is the local unit of the US mining giant Newmont Mining. BRMS, through its 75 percent owned subsidiary PT Multi Daerah Bersaing, holds a 24 percent stake in NNT, which runs the country’s second-largest copper and gold mining site Batu Hijau in West Nusa Tenggara.
NNT is BRMS’ main productive asset. Other projects, including zinc mining company PT Dairi Prima Mineral, copper and gold mining company PT Gorontalo Minerals, and gold and molybdenum project PT Citra Palu Minerals, remain at the development stage.
NNT produced 85 million pounds (lbs) of copper in the January to June period, an almost 66 percent drop compared to 141 million lbs in the same period last year. Gold production dropped 73 percent to 38,000 troy ounces (oz) in the first half of the year compared to 143,000 oz in the same period last year.
“This temporary production drop has been anticipated due to the on-going Phase 6 development in the Batu Hijau mine. Once that is completed by the end of this year, NNT is expected to increase its copper and gold outputs in the year 2013,” BRMS said in a written statement.
Batu Hijau has 8.4 billion lbs of copper and 7.9 million oz of gold reserves, according to figures from BRMS’s website. Last year, Batu Hijau produced 283 million lbs of copper and 318,000 oz of gold.
Besides Batu Hijau, NNT’s concession area also covers the Elang and Rinti sites. The company said that the two sites also have big copper and gold prospects. BRMS cited Newmont’s head of Asia Pacific operations announcement that the Elang site might have larger deposit than Newmont’s Boddington mine in Australia.
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