Straits? Sebuku coal production down in Q3

Australian mining company Straits Resources Limited reported on Tuesday that its coal production from the Sebuku mine in South Kalimantan dropped to 457,000 tons in the third quarter of 2003 from 579,000 tons in the same quarter last year.

?The main impact on production for the quarter was due to change in the mining contract. The new contractor mobilized sufficient equipment to commence mining in mid September and mine production would be expected to ramp up to full scale in October concurrent with full mobilization of equipment,? said Straits in its quaterly report.

Straits also reported that sales in the quarter dropped to 558,000 tons from 625,000 tons.

Meanwhile, despite the lower sales, Straits said that spot prices have recently recovered in the thermal coal market. ?This improvement in prices is expected to continue and should bode well for 2004 price negotiations,? the company said.

Sebuku was particularly active in the market in wooing potential new customers in the Korean and Japanese markets for its new lower sulphur coal. ?Production of new lower sulphur coal opens up the opportunity to earn longer term, high quality contracts with new customers. The benefits of this are expected to be seen in 2004,? said Straits.

Further, Straits confirmed that the life-of-mine plan is currently being revised on the basis of the new resources. ?Preliminary indications are that mine life has been extended by an additional 5 or 6 years to 2011 from the original mine closure date of 2005,? Straits added.

Straits has an 80 percent ownership in PT Bahari Cakrawala Sebuku, which operates the opencut truck and shovel coal mining. The remaining 20 percent stake is held by PT Reyka Wahana Digdjaya. (robert)