Major coal miners raise production targets next year, market is still growing

A number of major Indonesia coal mining companies have raised their production target next year to meet increasing orders as well as to take the advantage of surging prices in the world market.

PT Indotambang Raya Megah (ITM), an Indonesian coal unit of Thai giant firm Banpu Plc for example, plans to increase its coal production next year to 26 million tons from this year?s revised target of 22.5 million to take the advantage of more favorable market condition, said the Banpu?s head- marketing and logistics Philip Gasteen.

He said that the market would be very strong next year and would be better compared to this year, but he did not give any figure. The company lowered its production target to 22.5 million this year from 23 million previously due to bad weather.

Major coal producer PT Berau Coal also plans to increase production to 20 million tons in 2011 from about 17 million tons in 2010. Up to November, the company had produced about 15.8 million tons, the company?s GM marketing & sales Eko B.F Natalina told Petromindo.Com

About 25 to 27 percent of the total production will be sold in the domestic market, with the rest will be shipped to the company?s main foreign markets namely China (25 percent), South Korea (15 percent) and India (10 percent).

The rest is shipped to others Asian countries such as Taiwan and Hong Kong, he said.

According to Eko, the average selling price would increase by between 15 and 20 percent next year. He also said that Berau had also delayed trial shipment to Vietnam to 2013 due to delay power project in Vietnam. The volume to be shipped to Vietnam?s Vinacomin had also been lowered to 500,000 from 1 million tons earlier.

South Kalimantan coal miner PT Adaro Indonesia also said that it would increase production to 47 million tons from 42 million tons to meet surging orders. In order to meet the target, the company?s Wara low-rank coal mine production would be increased by between 4 and 5 tons next year from 1-2 million ton this year.

The company?s director & chief marketing officer Edwin Tsang said that 40 percent of its Wara coal production would be sold on the domestic market, with the remaining 60 percent to be exported mostly to China and India.

?All of our coal for next year production has been fully allocated,? he said.

He estimated the price would raise by about 10 percent next year. According to him, Hong Kong which buys about 10 percent of the production is now the main buyer. India will also become another major buyer next year with its plan to increase its sales also to about 10 percent of the company?s total production.

?We don?t want to supply more than 10 percent to any country. Its our policy? he added.

Meanwhile Indonesia?s number one coal producer PT Bumi Resource had set a target to produce 76 million tons next year from about 66 million tons this year, Peter Ball, VP marketing of Bumi Resources said.

He also said that market for next year is still growing, without giving details.

East Kalimantan coal miner PT Kideco Jaya Agung will also raise production to 31 million tons in 2011 from 28.8 million tons this year.

?We are on track to meet this year?s production target,? the company?s managing director CH Richard Lee said, adding that up to November, total production had already reached 26.5 million tons. Like others, Lee estimates coal prices would be better next year, but he did not give details. (denny)