Indonesian publicly-listed coal miner Resource Alam aims to increase annual production from 2 million to 3.5 million tonnes in the next 12 months. To achieve the increase, the company intends to invest in more equipment and accelerate removal of overburden.
The company plans to build a blasting warehouse at its mining site in Loa Janan, East Kalimantan, to help accelerate production.
It has set aside US$1.5 million for capital expenditure in 2018 to buy heavy machinery, repair equipment and develop infrastructure.
As at the end of the September quarter Resource Alam had produced 1.28 million tonnes, well below its initial 2017 target of 4.5 million tonnes. It says this was due to heavy rainfall occurring almost every month since the beginning of the year while it had also been dealing with several issues related to subcontractors.
“Some of our subcontractors were too aggressive. They invested heavily in other mining sites, so when the coal prices dropped, they collapsed. This has affected our production as well,” said Resource Alam business development director Wimpi Salim.
Despite these issues, the company’s performance has been supported by rising coal prices. The Asian benchmark coal price, Newcastle thermal coal, reached its highest point at $103.50 per ton in mid-September, after hovering at an average of $86.60 per ton in the first quarter.
Resource Alam booked a net profit of US$8.1 million in the January-September period, a 13.63% rise from $7.19 million in 2016.
The company has concession areas with a coal contract of work and mining permit licences through its subsidiaries – PT Insani Baraperkasa in East Kalimantan, PT Loa Haur in Central Kalimantan and PT Kaltim Mineral in East Kalimantan.
South Korea is its main export destination, with a total sales volume of 46% followed by China with 19% and Thailand with 9%.
The company continues to diversify its business by developing a 6.4MW capacity hydroelectric power plant in West Java. Construction is expected to finish next year.
Resource Alam