KPC may miss this year?s production target

East Kalimantan based giant coal mining firm PT. Kaltim Prima Coal (KPC) said during the first four moths of 2002 it was 500,000 tonnes behind target and may miss this year?s production target of 17.9 million tons.

?During the first four months, the operations is badly affected by rain, KPC only produced 4.5 million tones. It?ll be a challenge to meet this year?s production target. If we get more rain than we plan, production will suffer," said Evan Ball, KPC?s acting COO in an interview at the mining site.

He said next rain was expected in October to December this year.

He further said that the current production capacity of the company was 18 million tonnes per annum. To increase capacity will require a reasonable amount of investment to upgrade facilities and infrastructures, he said.

He added that to increase production capacity to 24 million tones PA, an investment of US$ 30 million was needed.

? With uncertainties over KPC divestment, the management had decided not to invest the money. With no certainties of whom our majority shareholders will be, BP and Rio Tinto has decided to spend as little as possible. What we are doing is just to maintain current production capacity, he said.

KPC is currently in the process of divesting its 51 percent stake to Indonesan owned business entities.

Evan said KPC could still operate at 20 million tons PA production for at least 20 years and further exploration could probably support production for another 20 to 30 years. (alex)