Bumi expects higher coal production, price in 2008

JSX-listed coal mininghouse PT.Bumi Resources expects to clinch higher sales and prices in 2008 as the company continues with expansion program amid tight supply market, a company official said.

Senior VP Investor Relations Dileep Srivastava told reporters on Thursday that 2008 coal sales from its KPC and Arutmin mines would be around 65 million tonnes, or around 8 million tonnes higher that this year?s sales target of 57 million tonnes.

Dileep said the company also expects average sales price to be above US$50 per tonnes FOB next year, significantly higher than this year?s estimated average of $43 per tonne. He said that tight supply and soaring global demand for coal will contribute to the increasing price.

The increasing price trend is apparent on the spot coal sales. The company has recently managed to secure several spot sales of US$50 per tonne FOB for its 5,300 Kcal GAR coal.

The company?s 2008 planned coal production has currently been 30-35 MT contracted, he said, adding that Bumi will maintain sales composition of 75 percent term contract and 25 percent spot.

Dileep said that the company, which is now debt free, will be spending $400 million on facilities and infrastructures within the next three years to increase production to 100 million tonnes in 2011. ?Our target is to produce 70 MTPA from KPC and the rest from Arutmin. (alex/denny)