ARMS: Berau aims to increase output by 10%
Thursday, February 13 2014 - 02:23 AM WIB
LSE-listed Asia Resources Minerals (ARMS) said that coal production at its IDX-listed coal unit PT Berau Coal Energy Tbk is targeted to increase by 10 percent this year from 23.5 million tons last year.
?The company's mine plan envisages growth in production for 2014 of around 10 percent and discussions with the Indonesian authorities about increasing the current quota beyond 23 million tons are on-going,? said Nick von Schirnding, CEO of ARMS in a fourth quarter production report on Wednesday.
?We remain very focused on cost reduction and asset optimization, which remains our priority in the continuing weak coal price environment," he added.
Elsewhere, the report said that that Berau?s coal production during the fourth quarter of last year increased slightly by 1 percent to 5.9 million tons compared to the same period in 2012.
The Indonesia-focused coal miner previously known as Bumi Plc said that Berau's stripping ratio for the year was 8.8bcm/t, a reduction of 8 percent over the same period last year.
The fourth quarter average selling price was US$57.2/t, which is 8 percent lower than the same period in 2012.
Berau's assets are located in the north eastern part of Kalimantan and consist of three operating mines, namely Lati, Binungan and Sambarata. Bumi Plc owns 76.2 percent stake in Berau.
The shift of production from Lati to the lower strip ratio Binungan area continued during the quarter resulting in Lati production being reduced by 12.4 percent year on year, ARMS said. However, this was more than offset by a 38.6 percent year on year increase in production at Binungan.
?Good progress continues to be made in respect of the company's asset optimization program, which is aimed at reducing costs and improving efficiency. Discussions with a number of contractors are at an advanced stage regarding rates for 2014 and a further update will be given at the company's full year results on 28 March 2014,? the report said.
Capital expenditure (including exploration and evaluation expenditure) for 2013 was originally forecast to be $87 million. ?Our focus on efficiency during the year resulted in capital expenditure falling by $49m to $38m,? it said. The lower-than-planned capital expenditure arose mainly from reduced spending on hauling roads and bridges, as well as on support infrastructure.
Given the current challenging market conditions, capital expenditure plans for 2014 have also been materially reduced, the company said.
| Q4 2013 | Q4 2012 | Q3 2013 | Q4 13 vs Q4 12 | FY 2013 | FY 2012 | FY 13 vs FY 12 | |
| Coal mined (mt) | 5.9 | 5.9 | 6.1 | 1% | 23.5 | 21.0 | 12% |
| Sales (mt) | 5.9 | 6.5 | 6.0 | (9%) | 23.3 | 21.1 | 11% |
| FOB average selling price ($/t) | 57.2 | 61.8 | 58.5 | (8%) | 59.6 | 70.9 | (16%) |
| Production cost of sales ($/t) | 40.0 | 34.7 | 39.7 | (15%) | 38.6 | 38.7?'? | - |
| Stripping ratio (bcm/t) | 8.7 | 7.6 | 9.0 | (13%) | 8.8 | 9.6 | 8% |
Editing by Reiner Simanjuntak