Jakarta. Berau Coal Energy, a local unit of London-based Asia Resources Mineral, projects production growth of more than 10 percent this year amid sluggish global economic expansion and declining coal prices.
Arief Wiedhartono, a director at Berau Coal Energy, said the company targets production of up to 26 million metric tons of coal this year, a 11.6 percent rise from last year, assuming coal prices range between $55 and $56 per ton.
In such a price range, the company’s revenue could reach approximately $1.46 billion this year, representing a 2 percent increase from last year’s figure, based on calculations by the Jakarta Globe.
Arief did not confirm the calculation.
In May, Berau Coal Energy produced 10.15 million tons of coal and it is estimated to reach 12.15 million tons by the end of June, according to Arief. He added that the company has booked up to $574 million in revenue by May with a gross margin of 24.3 percent.
“Amidst a weakened coal market, the company will maintain focus on cost-saving and asset optimization,” Amir Sambodo, the newly appointed president director of Berau Coal Energy, said on Monday.
Amir said the company seeks to boost production and reduce operational costs to compensate for declining coal prices.
“Berau seeks to trim energy production costs by exploring energy alternatives, such as the use of additives and biofuel,” he said.
In line with the company’s cost-saving measures, the president director said Berau Coal Energy has decided against expansion this year, emphasizing that its plans to focus on plant maintenance instead.
According to Arief, the company has up to May, spent around $5 million of this year’s capital expenditure — most of which was used for maintenance.
During its annual shareholder’s meeting on Monday, Berau’s shareholders approved the appointment of Amir Sambodo, who is also the chief executive of Asia Resource Minerals, to replace Eko Santoso Buidianto as president director.
The appointment of Bob Kamandanu as Berau chairman was also approved, after his appointment as chairman at Asia Resource Minerals.
This was done to improve management efficiencies between Asia Resource Mineral and Berau Coal Energy, Amir said.
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