Major miners PT Bukit Asam (PTBA) and PT Bumi Resources (BUMI) reported sales volume increases in the first half of the year despite declining prices that resulted from high supplies
ajor miners PT Bukit Asam (PTBA) and PT Bumi Resources (BUMI) reported sales volume increases in the first half of the year despite declining prices that resulted from high supplies.
State-owned PTBA recorded coal sales volume of 8.8 million tons in the first six months of the year,an increase of 19.7 percent from the same period last year.
'We are in line with our plan to sell 20.6 million tons by year's end. We adjust our sales with our transportation capacity,' PTBA corporate secretary Joko Pramono said.
According to Joko, the company saw the operation of 44 new locomotives belonging to state-owned railway company PT Kereta Api in the first half of the year.
The locomotives transport PTBA's coal from mining sites in Tanjung Enim, South Sumatra, to Kertapati Port in Palembang and Tarahan Port in Bandar Lampung. An additional 230 carriages arrived in May.
'The locomotives and carriages will be in full operation in the second half to help PTBA achieve its target,' Joko said.
Coal miner BUMI, which has a 65 percent stake in PT Kaltim Prima Coal (KPC) and a 70 percent stake in PT Arutmin Indonesia, said its sales volume would reach 38.7 million tons during the January-June period compared to 32.2 million tons in the same period last year.
'The 20.2 percent expected increase is mainly due to outperforming production at KPC,' BUMI director and corporate secretary Dileep Srivastava said.
BUMI is targeting to sell 74 million tons by year's end, an 8.8 percent rise from 68 million tons in 2012.
'We'll review our guidelines in October,' Dileep said, responding to whether the company would revise up its sales target given the two-digit growth in the first six months of the year.
Indonesian companies are pumping up production as well as controlling costs in an attempt to scale down the effect of plunging coal prices due to lower demand amid the weakening global economy.
Indonesia's coal exports rose 21 percent to 163.69 million tons during the January to May period this year compared to 134.98 million tons year-on-year, according to figures from the Trade Ministry quoted by Bloomberg on Wednesday.
Coal prices have dropped by more than half since the middle of 2008, Bloomberg reported, on the back of slowing imports from China and rising production. The benchmark price for Asia's thermal coal at the Australian port of Newcastle stood at US$76.4 per ton at the end of last week. The price reached $192.5 per ton in July 2008.
The Energy and Mineral Resources Ministry set the country's coal reference price at $81.69 per ton in July this year, 3.7 percent lower than $84.87 per ton in June and 6.7 percent down from $87.55 in January.
PT Panin Sekuritas analyst Fajar Indra said coal miners might report further drops in coal selling prices in the third quarter of the year due to rising production.
'We are seeing declining spot price [Newcastle spot price] in the second quarter ' due to rising supply ' compared to the first quarter. Given miners and buyers coal contracts, price changes are usually reflected three months after. Therefore, we will see companies report lower selling prices in the third quarter,' Fajar said.
Shares in PTBA closed at Rp 11,500 on Wednesday, declining 6.5 percent compared to a day earlier. Meanwhile, shares in BUMI rose 1.96 percent to close at Rp 520.
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