Berau Coal revises down 2002 production target

East Kalimantan based coal-mining company Berau Coal may revise down coal production target of 8.2 million tons this year to 7.5million tons, according to industry sources.

The sources said the main reason for production target cut was because of the prevailing regulations that would not allow the company or its contractors to credit their VAT as coal is declared not subject to VAT.

?In order to meet 8.5 million tons target, additional investment on heavy equipments is needed, but because the VAT cannot be credited against coal sales, its becoming uneconomic,? said the sources.

During the first quarter of this year, Berau only managed to produce 1.26 million tons of coal.

In 2001, Berau Coal produced 6.8 million tons of coal.

Berau Coal is 60 percent owned by heavy equipment maker United Tractors and 30 percent Armadian Tritunggal. The remaining 10 percent is owned by Japan?s trading powerhouse Nissho Iwai. (alex)