Resources Prima obtains reduction in waste mining rate
Tuesday, April 7 2015 - 02:02 AM WIB
SGX-listed Resources Prima Group Limited, a coal mining company with integrated operations including coal mining facilities in Indonesia, said that it has entered into an agreement with its Indonesian waste mining contractor, PT Cipta Kridatama, which provides for a revision of the waste mining rate charged by the waste mining contractor.
Resources Prima said in a statement Monday that both parties have agreed on a revised waste mining rate which will result in a cost reduction of US$0.31 per bank cubic meter (bcm).
?The revised waste mining rate will be implemented upon the receipt by the group of its explosives permits which the management expects in May 2015. The impact will be a potential cost saving (including value-added tax) of between US$2.70 per mt to US$3.40 per mt of coal,? Resources Prima said.
Actual savings to be enjoyed by the group will depend on the monthly stripping ratio of the group?s mine, it added.
Waste mining costs is the single largest component of the group?s cost of goods sold (COGS), accounting for approximately 45 percent of the group?s COGS during the first nine months ended 31 December 2014, based on the group?s unaudited financial statements for the nine-month period.
As such, any reduction in the waste mining rate will have a positive impact on the group?s gross profit margin, the company said.
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, through its Indonesia-incorporated subsidiary PT Rinjani Kartanegara, has been granted a Production Operation IUP which is valid for an initial term of 12 years until 24 November 2021 (extendable for up to two (2) additional ten (10)-year tenures) to carry out coal mining operations in the mining concession area (with an area of 1,933 ha). The group has been issued with a ?borrow-use? permit by the Indonesian Minister of Forestry in respect of an area covering 308.54 ha of the mining concession area.
The group, through PT Rinjani, commenced mining operations in June 2012 with first sales in November 2012. Currently, the group has submitted an application for a ?borrow-use? permit for the remaining 1,624.46 ha of the mining concession area.
Editing by Reiner Simanjuntak