Resources Prima anticipates higher coal reserves
Monday, January 19 2015 - 01:29 AM WIB
SGX-listed Resources Prima Group, formerly known as Sky One Holdings Ltd, said Monday that its Indonesian subsidiary PT Rinjani Kartanegara has submitted application for a second ?borrow and use? forestry permit with the Indonesian Ministry of Forestry.
The company said in a statement that once the second permit, which is needed to clear forested land for coal mining activities, is approved, it would proceed with exploration activities that could lead to higher reserves and resources as its coal concession East Kalimantan.
Resources Prima operates a 1,933 hectares concession the province. Currently only 308.54 ha of the total concession area have obtained the ?borrow and use? permit. The company is seeking for a second permit for the remaining 1,624.46 ha area.
Resources Prima Group Limited is a mine owner and primarily engages in the business of coal exploration and coal mining, currently, in East Kalimantan.
The group operates coal mines in Indonesia through indirect subsidiaries PT Pilar Mas Utama Perkasa and PT Rinjani Kartanegara, which are both East Kalimantan-based coal miners with combined concession of 1,933 ha. The two firms were majority controlled by Energy Prima Pte Ltd, which reportedly had been acquired by Resources Prima for S$265 million late last year.
Despite the current drop in coal price, the company said in a statement that realized production in 2014 was expected to be higher.
Executive Chairman and Chief Executive Officer Agus Sugiono said, ?Despite the competitive environment and cautious sentiment with respect to the coal industry in Indonesia, our senior management remains confident about the long term growth prospects of our Company due to our fundamentally strong integrated business model. Operationally, we continue to move in the right direction as reflected by the growth in our production volume as well as the strengthening of our business model which includes a diversification of our income stream.?
Since commencing mining operations in June 2012, the company?s production volume of coal has risen from approximately 0.4 million tons in the financial year ended 31 March 2013 (FY2013) to approximately 1.2 million tons in the financial year ended 31 March 2014 (FY2014). Over the same period, its sales volume also increased from approximately 0.3 million tons in FY2013 to approximately 1.1 million tons in FY2014.
?Mining operations have continued as normal during the nine months ended 31 December 2014, with an expected increase in coal production volume as compared to the corresponding period in the previous financial year,? the company said in the statement.
Management expected the company to enjoy a cost advantage through the usage of its own fully integrated coal mining facilities such as the coal stockpile, coal crushers, coal conveyor system and jetty facilities compared to its peers operating without their own facilities. Additionally, management plans to grow its recurring income through the provision of such coal mining facilities to third party mine owners.
Editing by Reiner Simanjuntak