Borneo keeps coal output at 2 million tons this year

By Cepi Setiadi

IDX-listed coking coal producer PT Borneo Lumbung Energi & Metal Tbk will not increase its production this year as the coking coal market is still in a bearish mode. However, the company is expecting demand to increase in coming months as a result of the startup of several smelters.

Borneo's Director Kenneth Raymond Allan told Petromindo.com on Monday that the company targeted to produce 2 million tons this year, almost the same as last year. "Now we are conducting efficiency in production cost," he said adding that in 2012, the company was able to produce up to 4.2 million tons and 3 million tons in 2013.

"Currently the price is still below US$ 100 per ton, not good enough" he said adding that so far the company is still supplying its existing customers from China, Taiwan, Japan and Turkey.

Allan expected that in the middle of this year there will be new customers from among smelter companies in the domestic market which are scheduled to start commissioning this year. "Some of them will need coking coal for blast furnace of their smelters. We have sent them our sampling, and is now waiting for order demand," he said.

Allan added that potential consumption for coking coal from the new smelters will be about 1 million to 1.5 million tons per year. "The prospect is very good," he said.

Borneo through subsidiary PT Asmin Coalindo Tuhup operates a concession located in Murung Raya, Central Kalimantan.

Editing by Johannes Simbolon