Banpu plans cost cutting in RI coal mine
Thursday, July 26 2012 - 02:26 AM WIB
"We have to lower costs and suspend unnecessary projects to maintain our sound financial status and cope with short-term coal price fluctuations," chief executive Chanin Vongkusolkit said.
Banpu operates five producing mines in Indonesia namely Indominco Mandiri, Kitadin and Kitadin Tandung Mayang and Trubaindo, all of which are located in East Kalimantan, and Jorong Barutama Greston in South Kalimantan. Banpu lists its Indonesian mines at the Indonesia Stock Exchange through its subsidiary PT Indo Tambangraya Megah Tbk.
Chanin said that the company has suspended up to US$600 million of its four-year investment plan and lowered its production target by 10 percent due to softening coal prices.
"Altogether, we're likely to delay until the end of 2015 some $500-600 million of our planned $1.75-billion capital expenditures," Chanin said.
Of the total amount, investments allocated for Australian operations will be lowered by to $400 million. Capital expenditure planned for Indonesia will be cut by $100 million from $345 million, while the budget for Mongolia is down by $250 million from $400 million. The Mongolian project, for example, is delayed because there is no urgency to mine coal during unfavorable price conditions. Under the previous plan, Banpu would have produced up to 1 million tons in Mongolia this year.(*)