Harum to limit spending next year amid coal downturn

IDX-listed coal mining firm PT Harum Energy Tbk will continue cost-saving measures next year by limiting capital expenditure at about US$5 million, equal to this year?s allocation, as coal price is expected to remain weak, Kontan reported on Friday.

The paper quoted Harum President Director Ray Antonio Gunara as saying that the capital spending will only be allocated for infrastructure maintenance and exploration activities.

Harum has suspended production at its coal mine in East Kalimantan run by subsidiary PT Santan Batubara as part of belt-tightening measures. The company?s production currently comes from another East Kalimantan subsidiary PT Mahakam Sumber Jaya.

As has been previously reported, production in the first semester of this year reached 2.3 million tons, which translates to a 45.2 percent drop compared to 4.2 million tons in the corresponding period of last year.

Ray said that the company is planning to revise downward its coal production target this year to about 4 million tons from the initial projection of 5 million tons given the current weak coal market condition.

For next year, production is projected at between 4-5 million tons, he added. (*)