T

he country’s biggest coal miner by market value PT Adaro Energy aims to balance out its mining business with more projects in the power and logistics and services sectors in order to wean itself off its dependence on one commodity.

Adaro Energy finance director David Tendian said to maintain stable profitability, it hoped to equally distribute its profit sources across the mining, logistics and services, and power sectors within the next decade.

“We may continue to obtain the most [profit] from mining, but it has to be more balanced,” he said during a press conference on Wednesday.

David pointed to the firm’s 2016 financial results, which show a more than 30 percent contribution in profits from its non-mining business.

“As an energy company, we cannot merely be a mining company that is wholly dependent on commodity prices because our profitability must be more stable in the future,” he said

Coal prices across the globe have remained volatile even though they are slowly climbing from their slump in 2015.

Reuters reported Asian benchmark Newcastle thermal coal price reached US$80.90 per ton on March 29, partly reversing a steep decline since last November.

The volatility of coal prices has hurt Adaro in the past few years as its business is mostly based on coal exports.

The past year, however, was not all that bad for the energy firm. In 2016, Adaro’s profits more than doubled to $334.62 million amid volatile global coal prices, thanks to a 14 percent drop to $1.84 billion in costs of revenue.

The drop was triggered by a lower strip ratio, a lower-than-expected fuel price and Adaro’s various internal efficiency measures.

The amount of royalties paid to the government — which accounted for 14 percent of costs of revenue — fell as well, in line with lower revenue. Adaro’s top line decreased to $2.52 billion last year from $2.68 billion in 2015.

The company expects to produce about 53 million tons of coal in 2017, around the same level as last year, and has set capital expenditure of up to $250 million.

Adaro Energy president director Garibaldi “Boy” Thohir stated that the firm wanted to maintain its production levels despite rising commodity prices and to ensure sufficient coal supply for the power plants Adaro wishes to develop.

The company has already ventured into the power sector with three coal-fired power plan projects, which in total will be able to generate 2,260 megawatts (MW) of electricity.

This includes the 2x30 MW Tabalong plant in South Kalimantan, which has been in operation since 2013, and two ongoing projects, comprising a 2x100 MW plant in Tabalong and a 2x1,000 MW facility in Batang, Central Java.

Boy said it was also looking to take advantage of the government’s new focus on mine-mouth power plants by developing several in Kalimantan and Sumatra, where it has previously invested $955 million to acquire 16 coal-mining concessions.

It hopes to develop plants with capacity ranges between 2x100 MW and 600 MW.

Diversification within the mining sector is also Adaro’s long-term goal. While thermal coal remains a major commodity, Adaro has already produced and exported 1 million tons of semi-soft coking coal to Japan.

Coking coal is used to manufacture blast-furnace coke and foundry coke, which is used in steel production, and the price hovered at $130 per ton at the beginning of the month.

“Seven of our coal concessions have sufficient potential [coking coal] reserves, but of course we cannot do everything instantly as we want them to be sustainable,” he said.

Adaro’s coal sales reached 54.09 million tons last year from 53.11 million tons in 2015. Only around 25 percent was sold domestically, while the remainder was exported, to markets such as China and India.