Renuka Coalindo eyes concessions in East and Central Kalimantan
Friday, August 3 2012 - 06:39 AM WIB
IDX listed coal trader and miner PT Renuka Coalindo Tbk, a subsidiary of India based Shree Renuka Energy Ltd, stated today that it is in the process of acquiring two concessions, one each in East Kalimantan and Central Kalimantan, expecting to complete the acquisition process in the next six to nine months.
?We're looking for concessions with similar or higher cv coal, especially in East and Central Kalimantan because these areas have better logistic facilities,? said the company's President Director Ganesh Ramchandra Mane after the company?s Shareholders General Meeting in Jakarta without providing further detail.
Renuka acquired PT Jambi Prima Coal (JPC) which has 1,000 hectares of concession area in Mandiangin sub-district of Sorolangun, in November 2011, a move that the company claimed to have successfully elevated its monthly production.
?The total coal production from JPC mine as of March 2012 is 898,944 tons, out of which 485,920 tons were produced during the year 2012,? it said in a statement.
Despite improving its financial performance, increasing its revenue from Rp 75,464 million in FY11 to Rp 279,924 million in FY 2012, as well as increasing gross profit from Rp 4,019 million to Rp 7,154 million over the same period, the company said that sharp drop of demand from India and China had caused the company?s net income has marginally declined.
Its net sales have more than tripled from Rp 75,464 million in 2011 to Rp 279,924 million in 2012, yet the company?s ?net loss for 2012 was Rp 6,455 million, a decrease in profit of Rp 13,455 million or 187 percent compared to 2011,? adding that while production cost for JPC reach US$32 per ton, its average realized selling price has been only slightly higher.
?Sharp drop in demand is likely to put the margins of Indonesian coal under pressure and more so for lower quality coal such as Jambi coal,? the company's President Commissioner Vishwanart Mathur said in a statement.
?Renuka is currently undertaking studies to establish feasibility of reducing transportation costs using river barging from mine mouth,? said Vishwanath.
JPC?s initial JORC results revealed indicated seam thickness at 4 to 8 meters of 5,181 kcal/kg cv coal (ADB), total moisture of 37.31 percent, 6 percent ash and 0.23 percent sulphur.
Ganesh said that the mine is well connected to the port. ?But long truck hauling remains our biggest challenge.? To address this problem, the company stated to have prepared plans to reduce costs, and hopefully increase its net margins.
Ganesh added that between US$10 and US$15 million worth of capital expenditure will be allocated for FY2013 to support the logistic projects, including completing the construction of its dredging facility in November 2012 thereby strengthening its barging aspects.
The company targeted to produce a total of 600,000 tons of coal from JPC this year.
Editing by David Mustakim