Bara Jaya suspends production

IDX-listed coal mining firm PT Bara Jaya International Tbk, formerly known as PT ATPK Resources Tbk, has temporarily suspended production due the current coal price drop and as the company has yet to obtain desirable price level from would-be buyers, Kontan reported on Tuesday.

?We won?t sell at a loss,? said Andreas Andy S., Corporate Secretary of Bara Jaya, which operates mines in Kalimantan, to the paper.

He said that the company will only resume production once it has obtained favorable price from the customers. ?Amid the current market condition particularly when we can?t predict when price will recover, it?s unwise to pile up coal stock,? he added.

Bara Jaya produces low rank coal, most of which exported to India, and the remainder to domestic power plants. Andreas said that the company is currently looking for domestic buyers particularly power plants.

Andreas said that the company could not set production target for this year, while acknowledging a possible worst scenario under which the company does not produce at all if it could not strike the right price with buyers.

As per November of last year, Bara Jaya only sold about 163,495 tons of coal, compared to 2014 same period of 670,192 tons, thus undermining its financial performance. Andreas, however, is hopeful that a recovery in the price of oil would trigger coal demand from India at the right price level. (*)