Kideco plans production increase, fully contracted for 2005

East Kalimantan-based coal miner PT. Kideco Jaya Agung is planning to increase 2005 coal production to 18 million tons from 16.8 million tons this year, tapping into supply- scarce world coal market, a company official said.

Kideco?s managing director Kim Sung Kook told Petromindo.com in an interview Tuesday that the company?s 2005 coal production has been 100 percent contracted, with 90 percent of the volume has been priced.

?2005 is going to be another good year for Kideco,? said Kim.

Kim that Kideco will be operating near optimum capacity of 18.8 MTPA in 2005.

Kim predicted that thermal coal prices will remain historically strong in 2005, especially in the first half, but will go softer in the second half due to supply increase. ?In the first half of 2005, Barlow Jonker index price will stay at US$52-53 per ton range, but would go down to as low as $45 per ton in the second semester due to coal supply increase from Indonesian coal producers,? he said. He did not give figure but said that Indonesian producers had been rushing to tap the high price by supplying more and more coal to the market.

Kideco sells 65 percent of its production to overseas market such as South Korea, Taiwan, Italy and UK, while domestically it supplies coal to Paiton Energy?s 2 x 615 MW power plant (1 MTPA), Jawa Power?s Paiton II 2x610 MW power plant (1.8 MTPA), both are located in East Java and to PLN?s 3400 MW Suralaya power plant in Banten province (2MTPA).

Kim considered current sales destination composition is already ideal for Kideco.? Kideco will maintain 65:35 composition,? he said.

Kideco operates a coalmine in Pasir regency, East Kalimantan. (alex)