Bayan plans up to $71m capex for Tabang infrastructure
Monday, May 8 2017 - 04:39 AM WIB
Courtesy of Bayan
IDX-listed coal firm PT Bayan Resources Tbk capital expenditure (capex) for this year is expected to be in the range of US$50 million to US$71 million.
Bayan said in an annual report published late last week that most of the funds will be used for the East Kalimantan Tabang project?s infrastructure. In 2017, the company will partially complete the road sheeting and road surfacing project, as well as various infrastructure at Tabang mine to cater for expanded production, replacing 2 cranes at Balikpapan Coal Terminal (BCT), and dry docking of Kalimantan Floating Transfer Barge-1 (KFT-1).
BCT is a special coal terminal managed by the company?s subsidiary, PT Dermaga Perkasapratama, which is located in East Kalimantan. A portion of the company?s coal is exported through the BCT.
Other than BCT, the company also owns and manages two KFTs through PT Muji Lines which are located in South and East Kalimantan as well as tug boat and other barges.
In managing operations, the company said it will use internal cash to fund all investments and operations.
The Company anticipates that benchmark coal prices will remain reasonably stable in 2017 with the annual average anticipated to be US$65 per metric ton. "Combined with the increasing production and sales volumes anticipated from Tabang, this means the gross profit margin will be maintained and potentially increased and overall the company will generate a profit in 2017,excluding any potential further impairment charge," Bayan said.
Total production for this year is targeted to be between 16.0 to 18.0 million tons or an increase of 63.2 - 83.6 percent from 2016 actual output of 9.8 million tons due to the increased production from the Tabang concessions.
The company targets net income before tax of between US$110.0 to 120.0 million, excluding any further impairment charge. "We expect Cash Costs will be consistent with actual 2016, which will be in the range of US$28/ton to US$32/ton. This is despite a slightly higher average strip ratio between 3.5to 4, primarily due to the planned expansion at PT. Teguh Sinarabadi (TSA)/ PTFirman Ketaun Perkasa (FKP) combined with PT Wahana Baratama Mining (WBM) entering a new mining area at a much higher stripping ratio." However, this will be offsetas the company will continue to implement cost reduction initiatives such as reduction in operation overheads and optimized mine planning.
The Bayan Group is engaged in open cut mining of various coal quality from mines located primarily in East and South Kalimantan. Being an integrated coal producer in Indonesia the Bayan Group through its various mines, produces coal ranging from semi-soft coking coal to environmentally-friendly low sulphur, sub-bituminous coal.
Editing by Reiner Simanjuntak