INDY sees coal output to rise to 41m tons, allocates $113.5m capex

By Firmansyah Sembiring

Despite the lingering downturn in the global coal market, IDX-listed integrated energy company PT Indika Energy Tbk (INDY) expects coal production this year to increase to 41 million tons from 39.1 million tons last year.

Company Director Azis Armand said on Wednesday that about 40 million tons of the targeted production will be contributed by its coal mining subsidiary PT Kideco Jaya Agung, with the remainder from PT Santan Batubara, a joint venture with coal miner PT Harum Energy Tbk.

Azis explained that the company is optimistic demand for its coal production will remain solid despite the overall gloomy market condition as the main customer of Kideco is state-owned electricity firm PT. Perusahaan Listrik Negara .

Regarding PT Mitra Tambangjaya Utama (MTU), a Central Kalimantan coal subsidiary it acquired in 2012, the company is still in the process of making cash review and obtaining final permits, but hopes that production can begin before the end of this year.

Azis acknowledged that the current weak global coal market has undermined the company?s selling price with Kideco saw average selling price fell by 16.87 percent to US$57.2 per ton last year from the previous year?s level, while the ASP for Santan Batubara fell by 15.86 percent to $73.7 per ton.

Elsewhere, INDY allocated capital expenditure of US$113.5 million this year. The largest recipient of the capex is IDX-listed coal logistics subsidiary PT Mitrabahtera Segara Sejati Tbk (MBSS), which has been allocated $35 million.

Another IDX-listed subsidiary PT Petrosea Tbk receives allocation of $30.1 million, while coal mining unit PT Multi Tambangjaya Utama gets $15 million. The remainders are distributed to PT Tripatra ($3.8 million) and for INDY as the parent company.

Editing by Reiner Simanjuntak