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Higher coal prices, efficiency jack up Bukit Asam’s profit
State-owned coal miner PT Bukit Asam expects to continue efforts to boost operational efficiency and diversify its business, as those measures have improved its performance during the first nine months of the year
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tate-owned coal miner PT Bukit Asam expects to continue efforts to boost operational efficiency and diversify its business, as those measures have improved its performance during the first nine months of the year.
The publicly listed company saw its net profit skyrocket in the third quarter of 2017 to Rp 2.63 trillion (US$194.62 million), a staggering increase of 250 percent from the corresponding period of last year.
“The surge in net profit was achieved by [higher production] and efficiency and the optimization of the average selling price of coal,” Bukit Asam chief financial officer Orias Petrus Moedak said on Thursday.
The average selling price of coal in the first nine months increased by 15 percent from last year, in line with the hike in the Indonesian Coal Index and the coal reference price (HBA), both of which buoyed the firm’s bottom line.
Meanwhile, the price of Asian benchmark Newcastle thermal coal reached this year’s highest level of $103.5 per ton in mid-September, after hovering at an average of $86.6 per ton in the first half.
Bukit Asam has also intensified efforts to expand its market by selling low-to-medium-calorie coal amid higher prices, resulting in a 31.7 percent jump in its revenues to Rp 13.22 trillion in the first nine months of this year.
The company increased its sales volume to 17.24 million tons of coal in the period of January through September, up 13.8 percent from the same period last year.
The majority of its coal, or 63.9 percent, was sold in the domestic market, while the remainder was exported to various countries, including China, India and Cambodia.
The coal miner targets to hike sales to 23.17 million tons in 2017.
It has devised plans to make its business more sustainable, such as by operating coal-fired power plant of its own with a capacity of 3x10 megawatts, which will supply electricity to its mining sites in Tanjung Enim, South Sumatra.
It also has a 2x8 MW power plant that supports its Tarahan port in Lampung.
To reduce its reliance on coal, Bukit Asam also plans to diversify its business by venturing into renewable energy, a move that would be supported by its massive plots of lands of up to 20,000 hectares, said president director Arviyan Arifin.
It plans to build solar power plants at its former mining areas to realize its renewable energy plan, namely in Tanjung Enim and Ombilin, West Sumatra, starting early next year.
Based on its calculations, 2 ha of land are generally needed to generate 1 MW of electricity from solar energy. Thus, the 20,000 ha of mining sites it currently owns may be sufficient to build solar power plants for up to 10,000 MW.
Notwithstanding the solar power plans, the company will continue to develop coal-fired plants that will require huge funding and collaboration with state-owned electricity firm PLN as well as other parties.
The projects include the Banko Tengah Sumsel 8 coal-fired power plant in Muara Enim, South Sumatra, which is expected to generate 2x620 MW of electricity; the Peranap power plant with a capacity of 2x300 MW; and the Sumsel 6 power plant with a capacity of 2x300 MW.
“The total investment for those three projects is about $600 million,” Orias said.
