Update: Jembayan to achieve 2010 production target despite loader collapse: Straits

Add: Cost of collapsed loader, Indonesian unit production, average price, contracted coal

Singapore Exchange-listed coal miner Straits Asia Resources Limited said its Jembayan Muara Bara (JMB) mine in East Kalimantan will be able to achieve production target of 9 million tonnes next year despite the collapse of its newly completed outloader.

CFO Graeme Tivey told Petromindo.Com on Tuesday that JMB will push the limit of old outloader to its maximum capacity of 7MTPA and is considering alternatives either to borrow loader from neighboring mine or to conduct direct truck-to-barge operations to load the remaining 2MT.

?We?re optimistic production target of 9MT could still be achieved in 2010,? he told Petromindo.com.

He said Straits has decided to abandon the collapsed loader and replace it by the new one with similar capacity of 5.5 MTPA. He said construction of the new loader will take 12 months and would cost the company US$15 million.

Straits last Thursday reported that JMB?s newly completed loader has collapsed due to heavy rain.

Straits constructed new loader at JMB as part of its plan to expand JMB?s capacity to 11-12MTPA

Tivey said that Straits will produce 12 million tonnes of coal from Indonesia next year, including 3MT from its PT Bahari Cakarawala Sebuku mine in South Kalimantan. ?Up 30 percent of 2010 coal output has already been contracted,? he said, adding that 2010 average price will be slightly lower than this year?s price of US$83-84 per tonne.(denny)