Publicly listed coal miners PT Baramulti Suksessarana (BSSR) and PT Resource Alam Indonesia (KKGI) are optimistic about the business climate in 2013 as coal prices rebound.
“That [the price] is much better compared to several months ago. The global economy picture remains challenging but economic data flow from the US and China suggest there is light at the end of the tunnel,” Baramulti investor relations head Adi Hartadi said in an email sent to The Jakarta Post.
As previously reported, the government expects the Indonesia coal reference price (HBA) to reach over US$100 per ton this year following potential economic recovery shown by the recent US fiscal-cliff budget deal.
The country’s average HBA only reached $95.5 per ton last year, far below the average price level in 2011 of $118.4 per ton.
Adi said Baramulti aimed to produce up to 5.5 million tons of thermal coal in 2013, 57 percent higher than the 3.5 million tons estimated last year. The company currently operates one mining site in Kutai Kartanegara, East Kalimantan, and another in Banjarmasin, South Kalimantan, through subsidiary PT Antang Gunung Meratus.
The Kutai Kartanegara mining site is located in a 2,460-hectare concession area with 54.6 million tons of coal reserves and 207.4 million of coal resources. Meanwhile, the Banjarmasin mine occupies a 22,433-hectare site and reportedly has 59.6 million tons of coal reserves and 860.7 million tons of coal resources.
China and India will remain Baramulti’s biggest markets this year, followed by domestic consumption, according to Adi. To support the target, it will purchase several supporting facilities and develop its infrastructures using funds generated from last year’s initial public offering (IPO).
Baramulti raised about Rp 509.9 billion ($52.88 million) from its IPO in October 2012. About Rp 234.55 billion of the funds will finance Antang’s capital expenditure (capex), while Rp 56.09 billion will be used as Baramulti’s capex.
“The capital expenditure will be spent accordingly up to 2014,” Adi said.
Between January and April 2012, Baramulti reaped $39.41 million in sales and $7.05 million in net profits. However, it has not submitted its 2012 full year financial report to the Indonesia Stock Exchange (IDX).
The company estimated that last year’s growth could go beyond 50 percent as it booked a total of $55.79 million in sales and $3.1 million in net profits in 2011.
Resource Alam commissioner Suria Tjahaja said that the company remained upbeat that business would be much improved this year compared to 2012.
“Our average selling price throughout last year was $52 per ton. We believe the price will increase, supported by brighter prospects in China,” he said.
Resource Alam has set the target of 4.7 million tons in coal production volume by year-end, up 11.9 percent from the 4.2 million tons last year. It produces low- and medium-calorie coal through subsidiary PT Insani Bara Perkasa in East Kalimantan province. It also has several other concession areas in East Kalimantan and Central Kalimantan provinces but they are still at the exploration stage.
Similar to Baramulti, Resource Alam’s sales are dominated by exports to China with 80 percent, followed by South Korea, India and domestic market.
The company set aside $2.5 million from its internal cash for 2013’s capex, which will include heavy equipment purchases, land acquisition and infrastructure development.
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