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akarta-listed coal miner PT Adaro Energy will likely cut down production at its mining site next year following ongoing decline in the commodity'€™s price.

Adaro president director Garibaldi Thohir said on Friday that his company was looking at output in the range of 52 million to 54 million tons next year, which would be up to 7 percent lower compared to this year'€™s target of between 54 million to 56 million tons. The main driver of the cut is the low price, according to Garibaldi.

'€œWe sell most of our coal under long term contracts and only a few we offer on the spot market. We will reduce the amount [of coal offered] on the spot market,'€ Garibaldi said on the sidelines of the signing of partnerships on fuel supply and the usage of a fuel terminal.

Coal miners worldwide have been reporting weak trade following the plunge in oil prices, which has been mainly caused by weakening global demand while other energy sources, particularly the shale gas and oil, are on the rise.

Indonesia, a major thermal local exporter, set its coal price reference (HBA) for 6,322 kcal/kal coal at a new low level of US$58.21 per ton for September, which is already 8.8 percent lower compared to a reference price of $63.84 per ton set in January. The September price is around 54 percent lowered compared to the all-time-high HBA price of $127.05 per ton set in February 2011.

Adaro reported it sold its coal at a 13 percent lower average selling price during the first half of the year compared to the price in the same period last year. In terms of volume, the company sold 26.6 million tons of coal during the January to June period, or 6 percent lower compared to the same period last year.

Following the continuing decline in prices, Adaro also recently adjusted its production target for this year to between 54 million and 56 million tons per year from an initial plan of between 56 million to 58 million tons.

'€œThe company'€™s coal output for this year has already been fully contracted,'€ Garibaldi said.

Figures from the Energy and Mineral Resources Ministry'€™s mineral and coal directorate general showed that the total production during the January to July period of the year reached 232.9 million tons, declining by approximately 15 percent compared to 274.9 million tons in the same period last year. Out of the total production, as many as 186.8 million were exported and only 46.1 million were delivered to domestic market. The government is aiming for a total output of 425 million tons this year, a figure that will unlikely be met given the current realization of production.

Shares in Adaro, which are traded on the Indonesia Stock Exchange under the code ADRO, closed at Rp 565 a piece on the last day of trading this week, an increasing by 4.63 percent compared to Rp 540 a piece a day earlier.