Bumi plans further production increase

JSX-listed coal mining house PT. Bumi Resources estimated its 2007 coal sales and production from its both Kalimantan mines; Kaltim Prima Coal (KPC) and Arutmin Indonesia, could reach 62 million tonnes in 2007, a 23 percent increase compared to this year?s production target of around 51 million tonnes.

In 2005, KPC and Arutmin produced 45 million tonnes.

The company said in an Analyst Meeting held in Jakarta Wednesday that production from KPC would reach 36.8 million tonnes this year, while Arutmin is expected to produce 14.4 million tonnes. Up until August this year KPC had produced 18.3 million tonnes, and Arutmin 10 million tonnes.

The company said that until the first half this year, average selling price reached US$40 per tonne. Production costs for the first half increased due to unusually high rain that impacting mining activity. Costs were also pushed up by higher stripping ration of 10 times from 9 times last year. Production costs for KPC reached $29.9 per tonne vs $26.4 per tonne for the whole 2005 and Arutmin?s production costs swelled to $25.8 from $23.8.

Bumi, which failed to sell KPC and Arutmin in a collapsed deal, is currently looking to sell 20-30 percent of KPC and Arutmin?s shares to strategic partner. The company has appointed Credit Suisse as matchmaker.

The company also said with the sale deal collapsed, plan to build coal-to-liquid facility in South Sumatra would be delayed. Bumi initially planned to develop its South Sumatra mine to produce 17-20 million tonnes per annum using proceed from the sale. The coal produced will be used to produce 8,000 barrels per day of liquid fuel. (alex)

Coal Production Volume-in million tonnes

Field	FY 03	FY 04	FY 05	Q1 06	Q2 06	H1 06	Jul-06	Agust-06	H2 06F	FY 06F
KPC
Sanggata	16.2	21.4	27.5	6.0	6.6	12.6	2.8	2.9	18.7	31.3
Bengalon	0.0	0.0	0.7	0.7	1.3	2.0	0.6	0.6	3.6	5.6
Sub Total	16.2	21.4	28.2	6.7	7.9	14.6	3.4	3.5	22.3	36.9
Arutmin
Senakin	6.0	6.0	4.5	1.2	1.1	2.3	0.4	0.4	2.1	4.4
Satui	6.6	5.8	5.4	2.1	1.6	3.7	0.4	0.4	2.6	6.3
Asam-Asam/Mulia	0.2	1.8	4.2	0.4	0.3	0.7	0.2	0.1	1.2	1.9
Batulicin	0.9	1.5	2.6	0.4	0.8	1.2	0.0	0.2	0.6	1.8
Sub Total	13.7	15.0	16.7	4.1	3.8	7.9	1.0	1.1	6.5	14.4
Total	29.9	36.4	44.9	10.8	11.7	22.5	4.4	4.6	28.8	51.3
Growth Rate	6.0%	21.7%	23.4%							14.2%

Coal Sales Volume-in million tonnes

Field	FY 03	FY 04	FY 05	Q1 06	Q2 06	H1 06	Jul-06	Aug-06	H2 06E	FY 06E
KPC	16.6	21.3	27.5	7.2	7.7	14.9	3.2	3.1	21.1	36.0
Arutmin	14.0	14.6	16.9	4.3	3.9	8.2	1.0	1.1	6.5	14.7
Total	30.6	35.9	44.4	11.5	11.6	23.1	4.2	4.2	27.6	50.7
Growth Rate	8.5%	17.3%	23.7%							14.2%

Weighted Average Selling Price

Company	FY 03	FY 04	FY 05	Q1 06	Q2 06	H1 06
Bumi	$24.8	$31.2	$40.1	$39.9	$41.2	$40.4
Growth rate	?	25.8%	28.5%	?	?	?

Field
KPC	$25.9	$33.3	$43.9	$40.5	$41.2	$40.9
Prima	$29.0	$39.5	$58.5	$62.3	$56.6	$59.7
Pinang	$26.1	$33.5	$46.6	$41.5	$42.6	$42.1
Melawan	$19.6	$28.1	$34.0	$29.7	$31.8	$30.8
Arutmin	$23.4	$28.0	$33.6	$38.6	$40.9	$39.7
Senakin	$23.3	$27.9	$39.2	$38.9	$45.6	$41.8
Satui	$23.8	$30.3	$40.9	$39.7	$42.1	$41.3
Ecocoal	$14.9	$19.6	$21.1	$27.3	$24.7	$26.1
Batulicin	$23.7	$29.9	$29.3	$43.6	$28.8	$38.6
Note: The Weighted Average Selling Price is based on FOB price before the government royalty

2006 Committed Sales Volume & Selling Price

Description	Million Mt	Price(US$)
KPC
Contracted + Committed price	27.6	41.31
Contracted + Unprice	5.37
Unsold	2.12
Arutmin
Contracted + Committed price	13.11	37.62
Contracted + Unprice	0.20
Unsold	2.03
Bumi
Contracted + Committed price	40.71	40.12
Contracted + Unprice	5.56
Unsold	4.15
Source: Shipment Program as per August 2006

Production cash cost-in US$/ton
	FY 05	Q1 06	Q2 06	H1 06
Bumi	26.4	26.8	30.1	28.5
KPC	28.0	28.5	31.1	29.9
Arutmin	23.8	23.9	28.0	25.8
Fuel Price, Fuel Consumption & Strip Ratio
Fuel Price (US$)	0.36	0.51	0.56	0.54
Fuel Consumption (lt/bcm)	1.2	1.2	1.2	1.2
Strip Ratio	9x	10x	10x	10x