Exclusive: Bumi to boost KPC production, Glencore to help marketing
Saturday, October 11 2003 - 02:15 AM WIB
?We are optimistic to be able to produce 20-22 million tons next year,? Ari Hudaya, president of Bumi resources told Petromindo.Com over phone interview Saturday. Ari Hudaya is also new president director of KPC and South Kalimantan coal miner PT. Arutmin Indonesia, which is also controlled by Bumi.
Ari said it would assign Switzerland-based giant coal trader Glencore AG to help KPC to market its product to Europe and USA. ?KPC will handle coal marketing to Asia, but whenever necessary Glencore will also help to handle Asian market.?
Ari said Bumi picks Glencore to help marketing KPC?s product because it has ?extensive network and experience?.
KPC currently sells almost entire of its production to export market under long-term contracts, with Japan companies as top buyers.
An industry source contacted by Petromindo.Com said that Bumi is pushing to increase production, as it would need huge amount of revenue to service its debts. Bumi financed the US$ 500 million acquisition almost entirely through premium-interest debts. ?KPC?s production is in hot demand, more over, KPC production capacity could easily be increased without significant capital expenditure,? said the source.
Meanwhile, Noke Kiroyan, former KPC president director and Rio Tinto executive said that Rio Tinto would still somehow be involved to in KPC?s marketing. ?Rio Tinto has long-term contracts with buyers. We have to make sure the supply to those buyers remain secure,? he said. But he declined to say whether Rio Tinto would be allocated right to market certain percentage of KPC?s production.
Bumi completes KPC acquisition from former owners, Rio Tinto and BP, on October 10, making Bumi the country?s top coal producer, as it also controls South Kalimantan coalminer PT. Arutmin Indonesia, which is targeted to produce 15 million tons of coal this year.
Bumi acquired Arutmin from Australian resources giant BHP-Billiton in 2001. Under the deal, BHP-Billiton will retain right to market 75 percent of Arutmin?s production. Earlier this year, Bumi acquired 51 percent shares of Hong Kong-based coal trader Enercorp Limited to manage Arutmin?s coal marketing. (godang/alex)