Harum suspends two coal concessions

IDX-listed coal miner PT Harum Energy Tbk suspended the operation of two of its four coal mining concessions in East Kalimantan due to the lingering drop in coal price, Kontan reported on Tuesday.

The paper quoted Harum?s Head of Investor Relations, Veronica Jordan as saying that the two affected concessions are PT Santan Batubara and PT Tambang Batubara Harum.

?The cost structure of Santan Batubara is higher than that of the Mahakam Sumber Jaya (concession), thus with the current coal price condition, it?s less economical (if continues) operating,? she told the paper, adding that the suspension started at the end of the first semester of this year.

The suspension would affect Harum?s coal output this year, which was initially targeted at 8-9.5 million tons this year, of which 1.3 million was expected to come from Santan Batubara. As of the first semester, the concession only produced 400,000 tons. The bulk of this year?s output was expected to come from Mahakam Sumber Jaya.

Santan Batubara, a joint venture with IDX-listed mining services firm PT Petrosea Tbk, operates a concession with remaining reserves of about 8 million tons of coal, with calorific value of 5,400-6,400 kca/kg.

Meanwhile, the Tambang Batubara Harun concession, which has reserves of 12 million tons of coal with calorific value of 5,400-5,800 kcal/kg, was initially targeted to begin production this year, but due to the current drop in the price of the commodity, the management has decided to suspend the production plan.

Harum?s net profit dropped by 47.2 percent to US$19.2 million at the end of the third quarter of this year compared to the corresponding period of last year, as revenue fell by 44.7 percent to $368.9 million. (*)