Bumi Plc to miss production target

By Alexander Ginting

UK-listed mining giant Bumi Plc reported on Monday that it would be missing 2012 coal production target as one of its subsidiaries will not be able to meet target.

The company said that PT Berau Coal, which has been projected to produce 23 million tons this year will only be able to produce between 20-22 million tons due to heavier than normal levels of rain that continued to impact the company in the second quarter as well as contractor performance issues.

Last year, Berau produced 19.4 million tons of coal.

Bumi Plc said that its other unit PT Bumi Resources Tbk, is expected to produce 32.5 million tons of coal for the first half (vs. 29.9 million tons in H1 2011). Bumi Resources is forecasting 75 million tons for the full year, in line with previous guidance, the company said.

Last year, Bumi Resources produced 65.9 million tons of coal from its two mines in Kalimantan, namely PT Kaltim Prima Coal and PT Arutmin Indonesia.

"It was disappointing that we delivered lower than planned production in the first half, coupled with higher costs. Severe levels of rainfall in the first half impacted our performance, with heavy rain and flooding in South Kalimantan and heavy rainfall in East Kalimantan. The lower production run rate impacted profitability across the Wider Group with limited ability to offset overheads," CEO Nalin Rathod said .

"For the full year I am confident we will deliver on the 20 - 22 million tons for Berau. Bumi Resources expects to produce around 75 million tons this year, which would ring total production for the Wider Group to around 95 million tons, a significant milestone, but one which assumes no further weather disruption in the second half."

Bumi plc has 85 percent interest in Berau Coal and 29.2 percent in Bumi Resources.

Editing by David Mustakim