Adaro?s Q2 output up 12%

By Puspita Maylana Devi

IDX-listed coal mining firm PT Adaro Energy Tbk reported another quarterly record for coal production in the second quarter of this year of 13.52 million tons (Mt), a 12 percent increase year over year and an 18 percent increase quarter over quarter.

?Our previous best quarter was in 4Q12 when we produced 13.31 Mt. During the quarter, we had good contractor performance and lower than average rainfall, which aided in overburden removal and production growth,? the company said in a statement received Wednesday.

In the first half of 2013, Adaro produced 24.94 Mt and said it?s on track to reach 2013 production target of 50 to 53 Mt. ?Our guidance is based on customer demand and we have contracted tonnage in-line with our yearly production guidance.?

In the second quarter of 2013, production growth was mostly from increased output at the Tutupan and Paringin pits. The company produced 1.62 Mt from Paringin, an increase of 80 percent and 548 percent from 1Q13 and 2Q12, respectively. ?In 1H13, we mined 2.52 Mt at Paringin and remain on track to achieve our production target from this mine. Production at Tutupan increased 15% to 10.06 Mt versus the previous quarter of 8.75 Mt.?

Wara experienced 4 percent q-o-q production growth to 1.84 Mt compared to 1.77 Mt in in first quarter of 2013. ?We increased production without any spend for heavy equipment in 2Q13, demonstrating our ability to reach higher volumes with our current fleet.?

At the beginning of 2013, Adaro introduced a new product called Envirocoal 4700 (E4700). E4700 is a stand-alone, unblended product from the northern area of the Tutupan pit. Sales of E4700 increased 144 percent to 2.29 Mt in the second quarter of 2013 versus 0.94 Mt in the first quarter of 2013 and totalled 3.23 Mt for first half of 2013. ?The increase in sales is due to our efforts marketing the new product to our customers. We are on track to reach our E4700 production target of 8 Mt for 2013 and have entered into contracts for the tonnage.?

Adaro?s total sales volume reached 13.77 million tons in the second quarter of 2013, an increase of 11 percent y-o-y and 23 percent q-o-q. ? During the quarter, we experienced strong demand from India and for the first half of 2013, India became the largest portion of our sales at 22%. In 1H13, India increased its total coal imports by more than 50%. We will continue to serve and prioritize the domestic market, which represented 20% of our 1H13 coal sales.?

In-line with strategy to better control costs at its operations, Adaro reduced its average planned strip ratio from 6.40x in 2012 to 5.75x in 2013. For the second quarter of 2013, the actual strip ratio was 5.90x, which was 8 percent higher q-o-q than 5.45x in the first quarter of 2013 and 19 percent lower y-o-y than 7.24x in 2Q12. ?As a result, overburden removal during the second quarter was down 9% y-o-y to 79.82 Mbcm. At the end of 1H13, the actual strip ratio at AI was 5.69x and we remain on track to finish the year at our planned strip ratio.?

Elsewhere, Adaro said that in the second quarter, its new floating transfer unit (FTU) arrived, which will perform shiploading activities at a rate of approximately 60,000 tons per day compared to a standard floating crane of 15,000 tons per day. ?Our infrastructure projects are on track after we commissioned one unit of our 2x30 MW mine-mouth power plant and switched on our out of pit overburden crusher and conveyor system.?

Editing by Reiner Simanjuntak