Straits secures buyers for 50% of 2009 coal production

Singapore Exchange-listed coal miner Straits Asia Resources Limited reported on Wednesday it has continued to successfully negotiate and price additional coal sales contracts for its 2009 production.

The company said it had contracted approximately 5.8 million tonnes of our 2009 production at an average sales price of US$112.60 per tonne. The company?s 2008 production of 9.0 million tonnes has been entirely contracted at an average sales price of $70.50 per tonne.

According to earlier report, Straits expected to produce 11million tonnes of coal in 2009.

?The average sales price reflects a blend of contracts for all three specifications of coal marketed by Straits Asia (namely Sebuku, Prangat and Jembayan), with contract prices for our highest specification coal exceeding US$155 per tonne, which is approximately comparable to prices on the forward curve before energy-adjustment,? the company said.

The company said it had not revised production target of 9 million tonnes for 2008 despite reports of abnormally high levels of rainfall in the South-eastern Kalimantan region in recent weeks.

In the 8 months to 31 August 2008, Straits had produced 5.8 million tonnes of coal.

The company currently produces coal from its Sebuku mine in South Kalimantan and Jembayan mine in East Kalimantan.

The company said it had put in place enhanced capabilities to avoid pit flooding by assuming responsibility for pit dewatering from its mining contractor and installing additional pumps and pipelines. Current pumping capacity at Sebuku is at least 160,000 cubic metres per day, a significant increase from the previous capacity of only 30,000 cubic metres per day in early 2007, the company said.

The company also reported that it is currently in advanced discussions with lenders to refinance and term-out the $230 million acquisition bridge facility, which was raised in December 2007 to fund the acquisitions of the Jembayan mine and Sebuku Northern Leases. (alex)