Adaro reports increase in 9mo coal sales
2009 production contracted
Monday, November 10 2008 - 06:10 PM WIB
The company said the sales included 861,000 tonnes of third party coal trading conducted by its Singapore-based coal trading unit Coaltrade Services International Pte Ltd. The remaining volume came from production of the company?s subsidiary South Kalimantan coal miner PT.Adaro Indonesia (AI).
The company reported that during the period, AI?s production increased by 6 percent to 28.75 MT despite seasonally difficult weather conditions at the beginning of the year.
Company?s President Director Garibaldi Thohir said that AI is on track to produce 38-39MT of coal this year and continued expansion plans to boost production to 42-45MT in 2009. The company is planning to boost production to 80MTPA in five years.
?The demand for Envirocoal is strong and all of AI?s planned production for the 4Q08 and 2009 is already contracted under term coal supply agreements. In 3Q08, Adaro entered into three new long term coal supply contracts with international customers to cover the increased production planned for 2009. Adaro is currently not seeking new customers. Nearly 50% of pricing for 2009 has been completed,? the company said without giving further detail.
The company expressed optimism despite softening international coal market. ??.. the demand for Envirocoal remains strong. AI has a certain degree of protection against coal quality switching as three major customers can only operate if they burn 100% of Envirocoal and a number of other customers must use some percentage of Envirocoal,? it said.
The company also reported that the Ministry of Energy and Mineral Resource of the Republic of Indonesia has stated in writing that, based on their evaluation, the coal price in certain agreements is too low and that Adaro Indonesia is to renegotiate the price so it reflects current prices. So far the results are encouraging and price renegotiations are progressing satisfactorily, it said.
AI| supplies coal predominantly direct to end-users and the rest via trading firms. The company has 40 customers, which are mostly power utilities, located in 18 countries.
AI is also the largest supplier of coal to the domestic market. In 9M08 approximately 24% of AI?s total sales were to domestic customers and 76% of sales were to international customers.(alex)