Altura reports lower coal production from E. Kalimantan mine due to higher rainfall

By Ruli Setiawan

ASX-listed Altura Mining Limited reported Friday that production at the Delta coal mine in East Kalimantan during the 3 months to 31 December 2013 remained consistent with the previous quarter with monthly average coal production of 118,531 tons (monthly average September 2013 quarter of 126,645 tons).

The current level of production is below the planned monthly average of 146,000 tons with delays in contractor supplied mining fleets and above average rainfall reducing coal output from the mining operation, said Altura, which owns more than 33 percent interest in the Delta coal mine.

During the quarter the mine operations experienced 51 rainfall affected days for a total of 772 millimeters which equates to almost double the rainfall from the September quarter (34 rainfall affected days for a total of 391 millimeters). The increased rainfall caused delays in both uncovering coal in the pits and haulage of the raw coal to the coal process plant.

The total coal production for the second half of 2013 was 735,529 tons which represents a 29 percent increase over the H1 2013 despite the increased influence of wet weather conditions.

Coal sales for the December quarter of 452,332 tons represent an increase of 42 percent over the September quarter despite some softening in the demand for coal during the quarter.

The December quarter average coal price of US$44.99 per ton (FOB Barge) was lower than the US$50.23 average for the September quarter, however this result was influenced by increased sales of lower calorie (4,400 GAR) product.

Production and sales for the quarter are as follows:

?	Dec 2013 Quarter Tons	12 Months to Dec 2013 Tons
Saleable coal production (100% terms)	355,593	1,254,784
Coal sold (100% terms)	452,332	1,315,343
Saleable coal production (Altura 33⅓% share)	118,531	418,261
Coal sold (Altura 33⅓% share)	150,777	438,448

During the quarter negotiations were completed with the Delta Coal mining contractors to reduce the current mining rates for waste removal and haulage. These successful negotiations resulted in a decrease in the base waste removal rate and applied from October 2013 onwards. The mining rate cost reductions were offset by a fall in the Indonesian Rupiah to the United States Dollar. This fall has caused an escalation in the contractor?s fuel costs which forms a significant proportion of the total mining costs.

The installation and commissioning of a new Stammler ?Flat Back Feeder? at the Delta owned and operated river loading facility was completed during the quarter. The installation of the new feeder and conveyor extension compliments the previously installed identical unit and provides greater efficiency for blending and loading the coal cargoes.

Elsewhere, the company said the finalization of the Pinjam Pakai (Forestry Lend / Use permit) remains the focus for the most northern tenement of Suryaraya Permata Khatulistiwa (SPK) which is intended to be the initial mining area. Altura has previously reported the matter of a forestry boundary shift which impacts the intended mining area of SPK. The boundary shift places part of the initial mining area in a ?buffer zone? imposed by the Department of Forestry.

Proposals from external consultants were received and reviewed during the quarter, and these consultants will be required to provide further submissions in regards to the approval process with the Ministry of Forestry. Altura will continue to seek rectification of the matter and proceed with the applications; however the exact timing for the issue of the permits is uncertain.

Editing by Reiner Simanjuntak