Kideco expects to produce 37 million tons of coal next year

PT Kideco Jaya Agung, one of the country?s major coal producer, has set a target to produce 37 million tons of coal next year, a 10 percent increase from this year?s production target of about 34 million tons, Bisnis Indonesia reported on Monday.

Wishnu Wardhana, the Commissioner of Kideco, said that about 35 percent of the projected production next year or about 13 million tons would be sold in the domestic market, and the rest for exports.

Wishnu is also the President Director of PT Indika Energy Tbk, which partly owns Kideco.

?The DMO from the government will not reach 30 percent, but our supply for the domestic market will be about 35 percent of the total production,? he said in a reference to the domestic market obligation (DMO) set by the government.

As earlier reported, the government has required coal miners to sell at least 20.3 percent of their total production in the domestic market next year. Under this DMO requirement, Kideco will have to sell at least 6.53 million tons of its coal production in the domestic market, next year.

Wishnu estimated there would be massive consolidation in the country?s coal mining operations next year as the impact of the fall of coal prices in the world market. Small miners may have to shut down their operations because their earnings would not be sufficient enough to support the operations.

As the result, he said, small and weak coal mining firms would likely become targets of acquisition by larger mining firms. (*)