Samindo plans much higher capex next year

IDX-listed mining contractor PT Samindo Resources Tbk plans to boost capital expenditure (capex) next year by 343 percent to US$13.8 million compared to this year?s allocation, news portal kontan.co.id reported Wednesday.

?The increase in the capex is part of preparations in responding to higher targets set by (the company?s coal mining) clients in 2018.? Samindo Investor Relations Manager, Zaki Natsir.

He pointed out as an example that the company?s key client, coal mining firm PT Kideco Jaya Agung, has asked Samindo to produce more coal next year.

Samindo has recently renewed its mining services contract with Kideco, an East Kalimantan coal miner, effective from January 1, 2018 to March 31, 2023. According to the new contract, Samindo has to conduct overburden removal, coal getting, coal hauling and drilling works for Kideco.

Zaki was quoted by Petromindo.com as saying on Monday that Samindo will increase the number of heavy equipment deployed at the Kideco mine given the higher production targets set by the latter company including 48 million bank cubic meters of overburden removal volume, 10 million tons of coal production, 27 million tons of coal hauling and drilling.

Samindo has suspended the purchase of new heavy equipment during the past two years due to the weak coal price environment. Zaki said that the 2018 capex will be mostly financed by internal funds. (*)