Altura reports drastic drop in coal production rate
Friday, July 31 2015 - 02:25 AM WIB
ASX-listed Altura Mining Ltd said that production rate at its Delta Coal mine in East Kalimantan continued to decline in the second quarter amid the lingering downturn in the global coal market.
The company said in a statement Friday that monthly production rate during the quarter ending June of this year reached 34,743 tons, a 63.60 percent drop compared to monthly rate of 95,452 tons in the corresponding period of last year, and significantly below the annual target of 1.5 million ton.
It said that the monthly production rate in the second quarter was also well below the previous quarter?s monthly rate of 76,208 tons.
?The drop in production has been caused by delays in entering new lower strip ratio mining areas and continued negotiation with Delta?s contractors in order to reduce mining costs and improve on site efficiencies,? Altura said.
The company explained that coal production has been reduced at the Delta Coal operations as the company continues negotiations with its mining contractors in order to provide a sustainable long term solution to consistent cost effective production from the mine. The mine aims to reduce costs in order to offset reductions in coal prices with consideration to the long term extraction of the mine?s considerable coal resources.
?Discussions with both mining contractors are based on a 13 percent reduction in overburden removal rates, allocation of newer lower strip ratio mining areas and overall improvements in equipment availability and productivity. It is planned to apply minimum operational performance targets linked to the mining contracts themselves,? the company said.
Coupled with the above matters Delta had a deferment of committed coal sales in May and June which forced the company to review its production in order to avoid overstocking and potential material handling problems with the product coal. ?Currently the mine is focused on providing conclusion to the contract negotiations and allocation of mining areas.?
Elsewhere, Altura said that during the quarter the company also engaged external Australian based mining consultants to conduct a review of the current coal resources, mining reserves and life of mine plan. An optimization process has been completed and shows significant opportunity to move production into lower strip ratio and higher calorific mining deposits within the concession. This work will also form the basis for the independent technical reports as a pre-requisite for the intended Singapore listing of Delta Coal and the Tabalong Coal concessions. ?It is anticipated that a revised Coal Resource and Coal Reserve estimate will be completed and released during the current quarter.?
During the June quarter the mine operations experienced 51 rainfall affected days for a total of 986 millimeters which was higher than the March quarter (50 rainfall affected days for a total of 868 millimeters). ?This sustained rainfall affected coal production with several coal inventory exposed pits becoming inaccessible for extended periods.?
The June quarter average coal price received was US$38.51 (equated to FOB basis) per ton which is in line with the previous quarter with coal sales ranging from 4,400 kcal /kg to 4,800 kcal/kg (GAR).
The Delta Coal mine is situated on a 1,260 hectare Izin Usaha Pertambangan (IUP) or Mining Permit in the Mahakam River Delta, in close proximity to the nearby major centers of Balikpapan and Samarinda. Altura has a 33 percent stake in the project.
| June 2015 Quarter Tons | June 2014 Quarter Tons | 12 months to March 2015 Tons | |
| Saleable coal production (100% terms) | 104,230 | 286,625 | 744,738 |
| Coal sold (100% terms) | 119,241 | 294,228 | 822,964 |
| Saleable coal production (Altura 33⅓%) | 34,743 | 95,542 | 248,246 |
| Coal sold (Altura 33⅓%) share ) | 39,747 | 99,409 | 274,321 |
Editing by Reiner Simanjuntak