Adaro sets moderate coal production growth target for 2018

PT Adaro Energy, Indonesia's second biggest coal miner, aims to increase its annual coal production by 4.2 to 8.1 percent to around 54 to 56 million tons in 2018 after enduring prolonged heavy rainfall that hampered its mining operations last year.

Adaro president director Garibaldi "Boy" Thohir said the company decided to set a moderate production growth target for 2018 as it needed to preserve its long-term coal reserves and supplies for its own power plants in the future.

Adaro has teamed up with Japanese power companies Itochu Corporation and Electric Power Development (J-Power) to jointly develop the Batang coal-fired power plant in Central Java, which will have the capacity to generate 2 x 1,000 megawatts (MW) of electricity once it commences operations in May 2020.

“We need to think long term because we have our own coal-fired power plants, including the Batang facility,” Boy said recently.

Adaro produced 51.79 million tons of coal and sold 51.82 million tons of coal throughout 2017, down 1.64 percent and 4.38 percent, respectively, compared to the previous year.

Of its total coal sales, 80 percent were exports while the remaining 20 percent came from the domestic market. Malaysia and China were Adaro’s biggest export markets, respectively, accounting for 15 percent and 12 percent of the company’s total sales last year.

Adaro has allocated between US$750 million and $900 million in capital expenditure in 2018, and has set a goal to book earnings before interest, taxes, depreciation and amortization (EBITDA) of around $1.3 billion to $1.5 billion. (bbn)