0 PTBA sees rising sales volume, prices this year

State-owned coal miner PT Bukit Asam (PTBA) expects its revenues to climb 21.7 percent to Rp 14 trillion (US$1.45 billion) this year, driven by increasing sales volume and higher average selling price (ASP). The publicly listed company expects to produce between 18 million and 20 million tons of coal in 2013, according to Bukit Asam president director Milawarma. “Sales volume targets will be more or less at the same level as production volume,” he said in Jakarta on Monday. The increase in production volume was set to meet growing coal demand, especially from foreign markets, Milawarma added. 

At the moment, Bukit Asam’s foreign market is composed of China, Hong Kong, India, Japan, Malaysia, the Philippines, Taiwan and Vietnam. This year, the company will focus on exporting high-calorie coal, with a caloric value above 6,000, as it provides a better profit margin. “Japan, for example, needs high-calorie coal for its technology and because that kind of coal produces low dust. Japan does not have that wide area to handle much dust,” he said. However, India will be an exception since Bukit Asam will continue exporting low-calorie coal to the country. 

With higher coal demand, the company hopes its exports will grow to reach 50 percent of its total revenues from the current 45 percent. Bukit Asam operates coal mines in South Sumatra and East Kalimantan, with coal reserves and coal resources estimated to reach 2 billion tons and 7.3 billion tons, respectively. Milawarma added that the company also expected higher prices to help Bukit Asam achieve this year’s target. In 2013, the ASP is estimated to rise 10 percent to around Rp 825,000 per ton. The estimated ASP is in line with government’s higher coal price forecast. 

The Indonesia coal reference price (HBA) is forecast to reach over $100 per ton this year from $95.5 per ton in 2012, as a result of the recent US fiscal-cliff budget deal. According to Milawarma, the price may even grow beyond 10 percent as a result of a possible scarcity. “Coal demand is expected to increase in northern countries as they have entered winter. Meanwhile, erratic weather is starting to disrupt coal mining operations and distributions in the south,” he added. Commenting on Bukit Asam’s planned expansion to Myanmar, Milawarma said that the company was looking to acquire a majority stake in a local coal mining business. 

“We are still holding an assessment because we would like to study the local policy first. We also would like to know whether or not it would be possible to export the coal products,” he said. This year the company set aside Rp 2.5 trillion to fund expansion, including a Rp 1.5 trillion port expansion in Tarahan, Lampung province, and a $18 million loading facilities upgrade at its Kertapati port in Palembang, South Sumatra. The Tarahan expansion means construction of a new ship loader and a new dock, and the purchase of four new rotary car dumper (RCD) units. 

The expansion will mean the port can manage large vessels and increase its capacity to between 22 million tons and 25 million tons from the current 15 million tons per year. The expansion funds come from Bukit Asam’s internal cash. Milawarma said the company had no plan to hold a rights issue this year, citing strong internal cash, which stands at Rp 5 trillion at the moment.

source : the jakarta post