Bumi Resources to review coal sales contracts

PT Bumi Resources TBk, the majority shareholder of major coal producers PT Arutmin and PT Kaltim Prima Coal (KPC) plans to review all the contracts related to the sales of its coal to foreign buyers, Investor Indonesia daily reported on Monday.

Bumi?s president director Arie S. Hudaya said in Jakarta on Saturday that the review of the existing sales contract was needed because the coal price had continued to show an upward trend lately.

?The price in the contract should be increased following an increase in the coal price in the market. We therefore will try to renegotiate the prices with the existing buyers,? he said.

The company?s finance director Eddie J. Soebary said that most of the existing contracts were based on a price reference of abut US$25 per ton, far lower than the current price which has reached about US$40 per ton.

The combined coal production of Arutmin and KPC is about 34 million tons a year. About 80 percent of the production are exported. (*)