Samindo hopes to soon get new coal mining contracts
Wednesday, May 4 2016 - 02:22 AM WIB
IDX-listed coal mining services company PT Samindo Resources Tbk said it has been in talks with two coal mining companies as it seeks new mining services contracts, hoping it could soon finalize at least one deal.
?The company has made approaches (to potential new clients), and moving towards finalization stage. There are one or two (potential new clients), but we can?t publish their names yet,? said Samindo Director Witoro Soelarno on Tuesday, adding that at least one contract can be signed in the second quarter period.
Samindo currently only have one client, which is East Kalimantan-based coal mining firm PT Kideco Jaya Agung. Samindo?s existing heavy equipment fleet has a capacity to produce 30-50 million tons of coal per year, but amid the lingering coal market downturn, which has forced many coal firms to slash production, coal production target for this year is set at only about 10 million tons, relatively the same as last year?s, while overburden removal volume at 45.2 million bcm, higher than last year?s 33 million bcm.
In the first quarter of this year, coal production was recorded at only three million tons, while overburden removal at 11.9 million bcm, Witoro said, but did not provide comparative figures for the first quarter of last year.
?Our production in the first quarter (of 2016) declined year-on-year because our client lowered production and there was heavy rain at the mine site in East Kalimantan. With the (expected) new clients, we hope to catch up in the third and fourth quarter,? he explained.
Samindo has allocated US$2.4 million for capital expenditure this year, down significantly from $6.69 million last year. Company Corporate Secretary Hananto Wibowo said that the capex would be used mainly to finance maintenance of equipment and operational expenditure. The capex will be financed via internal cash reserves, which as per March 31, 2016 stood at $35.54 million.
Editing by Reiner Simanjuntak