Bumi Plc targets 23m tons for Berau this year

By Romel S. Gurky

LSX-listed giant coal mining group Bumi Plc has recently issued its production report for the fourth quarter to 31 December 2012, in which subsidiary PT Berau mined 5.9 million tons of coal, 7% higher than in Q3 2012 or up 15% from the same period in previous year.

Berau sold 6.5 million tons of coal in the quarter, 30% higher that the same period in the previous year.

The group stated that full year production target for coal mined of 21 million tons at Berau was achieved, while production cost of sales were $36.1/t in the quarter, down 19% on the same period last year, helped by reducing stripping ratio from 9.4bcm/t to 7.6bcm/t, also down 19%.

Prices for thermal coal for Berau was down 31% in the quarter at $61.8 per ton compared to the same period in 2011.

"Longer term initiatives that are being undertaken and are aimed at changing the cost structure of the mining business of Berau Coal include the electrification of the mine through the construction of a power plant using its own low CV coal, this may include electrification of the 28km route between Binungan and the Suaran port; introduction of an in pit crusher and conveyor (IPCC) system which can reduce overburden truck haulage distances by up to 2km with a consequent reduction in fuel usage and lost time due to rain; replacement of aged equipment with newer, more reliable, more efficient equipment; and the reduction of double handling of coal by removing bottlenecks through investments in new equipment and infrastructure," the group said in a statement made available at the exchange.

Having demonstrated the capability to grow production from 17.4 million tonnes in 2010 to 21. million tonnes in 2012, a compound annual growth rate (CAGR) of almost 10%, Bumi stated that going forward, Berau is targeting 2013 production of 23 million tons and a medium term target of 30 million tons per year.

"We plan to review the feasibility of achieving up to 40 million tons of production by further review of the mine plan and in particular the investments in infrastructure and equipment which would be required. This plan will be developed throughout 2013," the group said.

Editing by Er Audy Zandri