PT BUMI Resources has an optimistic outlook for its coal operations in 2017 with sales expected to be 5% to 7% higher than last year while its average selling price is expected to be at least 30% above 2016 levels. The company expected 75% of its sales volume to be committed by the end of March.
Bumi is one of the world’s largest coal exporters with its KPC mine being the world’s largest export coal mine. It is the largest thermal coal producer in Indonesia with KPC and Arutmin commanding a dominant share of Indonesian coal production in 2016.
Total coal production in 2016 was 86.5 million tonnes, up from 81.2 million in 2015 and 84 million in 2014.
During the December quarter coal mined increased 12.3% to 23.8 million tonnes from 21.2 million in the same quarter of 2015. Arutmin’s quarterly production increased 37.2% to 9 million tonnes from 6.5 million and KPC production increased 1.2% to 14.9 million tonnes from 14.7 million.
The sales volume increased 11% from 79.3 million tonnes in 2015 to 87.7 million in 2016. Arutmin sales increased by 15.3% from 24.8 million to 28.6 million tonnes in 2016 and KP sales increased by 8.4% from 54.6 million to 59.1 million tonnes.
In the December quarter coal sales increased by 10.2% to 23.1 million tonnes compared to the same quarter of 2015. Arutmin sales increased 35.5% to 8.4 million tonnes from 6.2 million while KPC sales were steady at 14.7 million tonnes.
The production cash cost decreased by 12% from US$30.2 per ton to US$27 per ton in 2016. Bumi says this was due to fuel and spare procurement efficiencies, lower mining operating costs and a higher production rate at an Arutmin mine.
The strip ratio reduced by 3.7% to 6.9 during 2016 compared with 7.1 in 2015 due to a reduction of 4.1% at KPC.
The company has 2.2 billion tonnes of marketable coal reserves and 12.4 billion tonnes of coal resources with high potential for reserves expansion as KPC has only been partially explored.
In 2017 the company expects to sell more than 40.866 million tonnes domestically, 26.951 million tonnes to India, 10.8 million to Japan, 5.84 million to the Philippines, 1.55 million to Malaysia, 1.338 million to China and 1.774 million to Taiwan.