Despite coal price hike, miners remain on the alert

Petromindo|Khalsa

Despite the current rising trend in the price of coal, moving towards near the US$100 per ton level, coal miners in the country remain on the alert as they could not truly predict the future direction of the commodity price as it fluctuates and can suddenly change direction.

Bisnis Indonesia quoted President Director of IDX-listed coal giant PT Adaro Energy Tbk, Garibaldi Thohir as saying that the company is optimistic that demand for the commodity will continue to rise amid massive development of coal-fired power plants in the country and elsewhere in the region.

?Nevertheless, Adaro remains on the alert because of the dynamics of the coal industry where the price fluctuates, and thus we can?t predict the price of coal,? he said.

Garibaldi said that despite the coal price hike, the company will maintain annual production level at around 52 million-54 million tons as the company wants to maintain its coal reserves for future use when many coal-fired power plant projects start to come on stream including those owned by the company.

Finance Director of IDX-listed integrated coal firm PT ABM Investama Tbk, Adrian Erlangga said that it is quite difficult to predict the direction of coal price, and how long the current price trend can be maintained. He said that it is possible for the coal price to change direction before the end of this year. ?We don?t know yet whether the current price can be sustained,? he said, but added that the company is proceeding with its plan to acquire new coal assets.

On Tuesday, the Newcastle coal contract, the Asian coal price benchmark, for November delivery increased by 0.10 percent to $98.50 per ton. Some predict that the price could reach $100 per ton level at the end of this year amid rising demand from China and the US. The North Korea nuclear issue is also providing support for higher coal price.(*)