Harum Energy produces 0.7m tons of coal in Q1

By Brigida Ernestina Elu Wea

IDX-listed Coal mining firm PT Harum Enery Tbk produced 0.7 million tons of coal in the first quarter of 2016 (Q1 2016) or 23 percent of the annual target of 3 million tons, declining 36 percent from the corresponding period in the last year (Q1 2015)

President Director Ray Antonio Gunara said the firm purposely cut production amid the low coal price environment as part of efficiency program.

?Our strategy is producing moderate volume in the beginning of the year and catching up later in the last quarters. We always adjust production to market?s demand,? he said.

All the coal production is sourced from PT Mahakam Sumber Jaya?s mine in East Kalimantan, while two other mines operated by subsidiaries Santan Batubara and Tambang Batubara Harum respectively have been suspended due to the low coal prices. Ray said the firm will resume production at the two mines if the coal price recover to the level of US$55-60 per ton.

?We have an option to acquire one mine but it is still under evaluation. The mine has a reserve of at least 10 million tons, also located in Kalimantan and has a competitive production cost. The calorie value is not an issue as long as it can be absorbed by the market,? he said.

All the firm?s coal is sold overseas with Malaysia accounting for 35 percent, Taiwan 31 percent, South Korea 24 percent, Japan 8 percent and others 2 percent. The buyers are mostly power plant firms. Eighty percent of the coal is sold on contracts, while the remaining 20 percent on the spot market.

?We have yet to explore the domestic market. Once the power projects have been completed, we?ll start selling on the domestic market,? he said.

Editing by Johannes Simbolon