Adaro reports higher 2010 coal production, sales
Tuesday, February 1 2011 - 01:45 AM WIB
Although Adaro managed to increase coal production during 2010 compared to 2009 production, the output was still below the company?s initial target of 45 million MT.
The company said that the total coal production in 2010 includes 2.5 million MT from Envirocoal-Wara pit and 0.5 MT from Paringin pit. The remaining coal was sourced from the firm?s main block Tutupan.
The company also said that coal sales during 2010 reached 43.84 million MT, including 2.05 million MT of Envirocoal-Wara coal, 6 percent higher than the 2009 coal sales of 41.4 million MT. The total sales include 1.39 million MT sourced from third party, with sales carried out by Adaro?s marketing unit Coaltrade of 1.39 MT.
Due to continuing heavy rains throughout the fourth quarter of 2010 and no dry season in the prior quarter, coal production dropped 15 percent to 10.36 milllion MT conmpared to a similar period of 2009. However, all contractors performed well and delivered the second best quarter of the year, the company said.
?Production from the new Wara pit was less affected as it is in the initial stages of development and benefited from a low overburden stripping ratio,? it said.
Despite the wet conditions, overburden removal increased 10 percent to 60.35 million bcm in the fourth quarter of 2010. The average overburden removal per day was 710,000 bcm, 616,000 bcm and 648,000 bcm in October, November and December, respectively. A new daily production overburden record of 915,000 bcm occured on Oct. 23.
During 2010, overburden removal increased 8% to 226 million bcm, however due primarily to the impact of wet weather Adaro?s contractors achieved only 88% of the plan. The rate of increase was well below the 31% increase in 2009, indicating the impact of not having a dry season in 2010.
Leading mining contractor PT Pamapersada Nusantara (PAMA) was responsible for 39% of Adaro Indonesia?s coal. PT Bukit Makmur Mandiri Utama (BUMA) and PT Rahman Abdijaya (RAJ) were responsible for 19% and 14% respectively.
Slightly less than 2009, Adaro Energy?s subsidiary PT Saptaindra Sejati (SIS) handled 25% of the total coal while Adaro Indonesia itself handled 1%.
PT Rante Mutiara Insani (RMI) assisted in the development of the Envirocoal-Wara pit and contributed 2% of Adaro Indonesia?s coal production.
In 2010, PAMA handled 40% of Adaro?s overburden, while BUMA, RAJ, RMI and Adaro Indonesia handled 19%, 8%, 2% and 1% respectively. SIS handled 30%, a similar portion as the 31% handled in 2009.
Meanwhile, all barging and shiploading contractors during handled lower tonnages in the fourth quarter of 2010 because of lower coal production, but cycle times improved slightly compared to the previous quarter.
The output from the floating cranes, self geared vessels and Adaro Energy?s coal terminal services unit PT Indonesia Bulk Terminal (IBT) declined due to the continuation of the unprecedented level of rainfall at the mining operations. Meanwhile, Adaro?s barging tonnage (barged directly to the customers) increased slightly by 2% to meet Adaro?s domestic coal sales obligation.
All barging and shiploading contractors? cycle time improved due to the shipment schedule being better matched with production. As a result, the average demurrage rate per vessel declined compared to the previous quarter.
The signing of three new innovative long-term barging contracts helped Adaro improve flexibility and efficiency. With these new contracts in place, Adaro was able to direct its barging contractors to barge for multiple routes, hence allowing for greater flexibility and higher utilization, resulting in an estimated 15% decrease in freight rates for tonnages covered by the new contracts.
Adaro plans to ramp up production to 46-48 MT in 2011, including 4-5 MT of Envirocoal-Wara. This new product continues to receive strong demand from countries such as India, China, South Korea and Indonesia. (denny)