Garda Tujuh to increase coal output to 3m tons

IDX-listed coal company PT Garda Tujuh Buana Tbk aims to increase production to 3 million tons this year despite the lingering downturn in the global coal market, Kontan reported on Friday.

While not providing comparative figure for full-year output in 2013, Kontan quoted company commissioner Pardeep Dhir as saying that output per June of this year has reached 1.3 million, nearly half of the full-year target.

The coal production will entirely come from the company?s only coal concession on Bunyu Island, in North Kalimantan. The 710 hectares concession contains estimated coal reserves of 169 million tons.

Kontan said that the coal output will be entirely sold this year. As of June of this year, Garda Tujuh has sold 1.55 million tons of coal to power plants in India, but Dhir declined to disclose the names of the buyers. The company sold the coal, under long-term contract, at prices of between US$13.50-$14 per ton.

Dhir said that amid the current weak coal market, the company has taken efforts to cut down costs to help maintain margins.

Elsewhere, the company has set a target for revenue to reach between $35 million and $50 million this year, with EBITDA of $5-6 million.

The company has allocated $4 million of capital expenditure this year, the same with last year?s, among others to replace aging and damaged equipment. (*)