Bumi to maintain 20-25% coal output growth annually

PT Bumi Resources expects to at least maintain its output growth at 20-25 pct per annum over the next seven years following the coal company's issue of US$600 million global bonds, finance director Eddy Soebari was quoted by AFX News as saying on Friday.

Soebari said that after deducting the cost of the debt issue, the company will use $442 million of the bond proceeds to refinance existing debt at Bumi's principal operating subsidiaries -- PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.

Of the remaining amount, $102 million will be allocated to working capital replenishment and some $36 million will be set aside as reserve funds, he said.

He said after debt refinancing, Bumi will be more flexible in allocating its cash flow to boost production.

“In the next seven years, we will try at least to maintain our production growth at a rate of 20-25 percent per annum and whenever possible, we will push it higher,” he said.

KPC and Arutmin last year produced a combined 40 million tons of coal, making Bumi the country's largest thermal coal producer/exporter, and the world's third largest exporter, Bumi said.

Bumi has said it hopes to raise its annual output to 70 million tons by 2007. (*)