Bara Jaya to increase coal production next year

By Romel S. Gurky

Petromindo|Boim

IDX-listed coal mining company PT Bara Jaya Internasional Tbk aims to more than triple coal production next year.

The company said in a presentation material last week that production for next year is targeted at 150,000 tons to be sold in the spot market. It did not provide details on the production target. The company this year produced only 45,000 tons of coal.

The company also said it would lease idle mining equipment to other miners in 2018.

Bara Jaya through subsidiary PT Mega Alam Sejahtera (MAS) operates a coal concession in Berau Regency, East Kalimantan Province, producing low rank coal with CV of 3,300-3,500 kcal/kg. Bara Jaya owns another coal concession namely PT Sarana Mandiri Utama in Tarakan Regency, East Kalimantan, which has yet to enter production stage.

MAS resumed production in recent months, following years of suspension due to weak price environment. Bara Jaya said that as per November, it could only manage to sell 45,000 tons of coal to a buyer in India at a price of US$26 per ton, resulting in revenue of Rp 16.7 billion.

The company acknowledged that its current low rank coal production has limited market, specifically India, as consumers prefer higher CV coal, thus giving the company little bargaining position in dealing with buyers. Bara Jaya relies on the spot market in selling the coal, contributing to factor hampering production.

Editing by Reiner Simanjuntak