Bumi says to produce 113MT of coal in 2013

Coal mining giant PT Bumi Resources plans to almost double output to 113 million tons (MT) in 2013 from 64 million tons planned in 2010.

The company said in Thursday that its subsidiaries PT. Kaltim Prima Coal (KPC) and PT. Arutmin Indonesia would produce 70MT and 30MT, respectively in 2013.

To expand the production, KPC and Arutmin will need a total of US$1.1 billion in capital expenditure over the next three years. Both firms will not ask for loans from Bumi, but, instead rely on internal cash, Bumi's corporate secretary and director Dillep Srivastava said.

Of the $1.1 billion in planned capital expenditure, around $700-750 million will be spent to buy mobile equipment such as excavator, dump truck and drilling equipment

"The fund will be payable on 5-6 years lease and the money will not come from banks, but vendor will finance (it) on soft term (period) of over 5-6 years. So there is no cash demand either on KPC, Arutmin or Bumi," he said.

The other $450 million will be spent, among others to raise capacity on transportation system and to increase ship loading capacity

The company has increased ship loading capacity from 4,500 tons per hour (tph) to 7,500 tph in May this year. Bumi and its partner Tata Power are studying possibility to build a second ship loader.

The rest would come from PT. Fajar Bumi Sakti (FSB) and PT. Pendopo Energi Batubara (PEB), which it acquired early 2009. FSB operates in East Kalimantan while PEB has a coal mine now at exploration stage in South Sumatra.

FBS, whose mine is located in Loa Ulung, Tabang in Kutai Kartanegara regency, has started production. Bumi?s economist chief Achmad Reza Widjaja told Petromindo.Com that coal production from FBS for next year is around 2.5 million tons, 4 million tons in 2012 and 9 million tons in 2013.

From Pendopo mine, Bumi is expected to start production in 2013 with a production rate of 4 million ton in the first year, he said.

?So, total production from Bumi will reach 113 million tons in 2013,? he said. Bumi will spend $150 million over the next three years to exploit FBS and Pendopo coal mines.

"Bumi will continue to expand their mining capability through investment in mobile equipment, infrastructure, and ship loading capacity. So in 2030, Bumi will be able to produce 230 million tons per annum," Dillep added. (denny)