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ast year was an unfortunate time for coal miners as declining price was reflected in plunging profits, prompting moves to cut cost this year.

A number of listed coal miners have tried to increase production and sales volume, but revenue grew slower as the increase in production and sales volume failed to offset drops in selling price.

PT Harum Energy –which is controlled by one of the country’s richest men Kiki Barki— for example, said that it booked a record US$1.04 billion in revenue in 2012, a 25.5 percent increase compared to a year earlier. The increase was supported by 43.5 percent rise in coal sales volume.  However, the company failed to translate rising sales into growth in net profit as its margin was tainted by 11.7 percent drop in average selling price (ASP).

PT Indo Tambangraya Megah (ITMG), a subsidiary of Thailand-based Banpu, reported similar trend. The company sold 10 percent more coal in 2012 compared to a year earlier but it was translated into only 2 percent growth in revenue due to around 7 percent drop in price. As a result, the company’s net profit fell 21 percent to $432 million last year.

World coal prices were affected by the slow global economy last year and increase in stockpile due to the usage of shale gas. Indonesia’s coal reference price (HBA) fell about 34 percent during January to December period last year. According to figures from the Energy Mineral Resources, the HBA stood at $109.29 per ton in January last year and swung to $81.75 per ton in December.

Coal prices have started to rebound since late last year. The HBA was set at $90.09 per metric ton in March.

State owned coal miner PT Bukit Asam president director Milawarma has said that coal price was expected to increase this year. “We predict that the price will increase particularly if China is able to stimulate its economic growth. Year on year coal price increase will be around 10 percent increase in 2013, but cannot be as high as in 2011,” Milawarma said.

China remains Indonesian miners’ main market.

PTBA saw 4 percent drop in ASP last year, leading to 6 percent fall in net profit despite 13 percent increase in sales volume last year.

Although coal price is expected to get better this year, coal miners will likely suffer from last year’s price decline as a number of long term contract have been set based on prices last year.

ITMG sales and marketing director Hartono Widjaja said that the company expected lower ASP this year compared to last year’s $90 per ton.

“It is due to the influence of last year’s price. Currently, we have secured contracts for 77 percent of our estimated production. About 44 percent of the secure contracts are in fixed price,” Hartono said, adding that contracts based on last year price were less than half of its secured contracts.

ITMG is to produce 29 million tons of coal this year, which will be around 5 percent increase compared to 27.5 million tons it mined last year.

Beside increasing production, ITMG said that it would undertake several measures to boost its profitability, including reducing stripping ratio, performing efficiency in logistics and prioritize expenditure only on urgent projects.

Harum shared similar opinion. The company said that it started last year efficiency measures to cut cost, through reducing volume of overburden removal as well as reducing stockpiling. Harum head of investor relations Veronica Jordan said that the company targeted to see 5 percent increase in production to 12.5 million this year compared to 11.9 million tons last year.

Biggest coal miner PT Bumi Resources said that inventory de-stockpiling was one of key factors to watch to maintain its margin. “Key challenge is high input costs in a softening price scenario which impacts margins. I’d say longer term prospect favor a hardening price environment and escalating demand. Lower fuel price, which is at its peak presently, would improve margins,” Bumi director and corporate secretary Dileep Srivastava said, adding that the company planned to reduce cost by $3 per ton by cutting its stripping ratio. Bumi is targeting 77 million tons in coal production this year.