Rabby Pramudatama, The Jakarta Post, Jakarta | Business | Tue, August 28 2012
Local coal mining companies are taking steps to limit production costs to avoid fallout from the Eurocrisis that has
already slowed demand in China, one of the world’s biggest coal buyers.
Publicly-listed PT Bukit Asam (PTBA), for example, has been selective mining, maintaining a low stripping ratio and reducing delivery timetables to keep production costs down.
Bukit Asam corporate secretary Hananto Budi Laksono told The Jakarta Post over the weekend that selective mining, which involves extracting only high quality coal, might help maintain the firm’s profit margins.
“We have anticipated this [the slowdown] since before the first half ended. The symptoms were already showing,” Hananto said over the telephone.
Moody’s investor service warned local mining companies “to keep their costs under control in order to retain their status as the world’s lowest-cost thermal coal producers.”
It also warned that China’s demand for coal might continue to decline in the second half amid increasing debt that poses as a “negative rating driver”.
Hananto said miners were more concerned with the selling price. “It can’t cover production costs and it erodes our profits,” he said.
The Newcastle thermal coal price, the benchmark for seaborne coal prices in Asia, set the average coal price around US$90 to $95 a ton in 2012.
Indonesia’s coal reference price (HBA) fell this month to $84.65 a metric ton, declining 3.4 percent from $87.56 in July and 25 percent from its high of $112.87 in March.
Also preparing for the fallout, PT Adaro Energy, the nation’s second-largest thermal coal producer, has revised its annual production target for 2012 to between 48 million and 50 million metric tons, down from 50 million to 53 million tons.
PT Berau Coal Energy, a subsidiary of London-listed Bumi Plc., said it would also lower its production forecast to 20 million and 22 million tons, down from 23 million tons.
Local coal mining companies are taking steps to limit production costs to avoid fallout from the Eurocrisis that has
already slowed demand in China, one of the world’s biggest coal buyers.
Publicly-listed PT Bukit Asam (PTBA), for example, has been selective mining, maintaining a low stripping ratio and reducing delivery timetables to keep production costs down.
Bukit Asam corporate secretary Hananto Budi Laksono told The Jakarta Post over the weekend that selective mining, which involves extracting only high quality coal, might help maintain the firm’s profit margins.
“We have anticipated this [the slowdown] since before the first half ended. The symptoms were already showing,” Hananto said over the telephone.
Moody’s investor service warned local mining companies “to keep their costs under control in order to retain their status as the world’s lowest-cost thermal coal producers.”
It also warned that China’s demand for coal might continue to decline in the second half amid increasing debt that poses as a “negative rating driver”.
Hananto said miners were more concerned with the selling price. “It can’t cover production costs and it erodes our profits,” he said.
The Newcastle thermal coal price, the benchmark for seaborne coal prices in Asia, set the average coal price around US$90 to $95 a ton in 2012.
Indonesia’s coal reference price (HBA) fell this month to $84.65 a metric ton, declining 3.4 percent from $87.56 in July and 25 percent from its high of $112.87 in March.
Also preparing for the fallout, PT Adaro Energy, the nation’s second-largest thermal coal producer, has revised its annual production target for 2012 to between 48 million and 50 million metric tons, down from 50 million to 53 million tons.
PT Berau Coal Energy, a subsidiary of London-listed Bumi Plc., said it would also lower its production forecast to 20 million and 22 million tons, down from 23 million tons.
No comments:
Post a Comment