JAKARTA. Some issuers of coal sector are optimistic to have better performance. Since the beginning of the year, the coal price has been increasing by 104.81%. Currently, coal price remains stable at the level of US$90 per metric ton.
The improvement in coal price has encouraged some issuers to be more expansive to increase the sales target. For an example, PT Bukit Asama tbk (PTBA) expects to increase its coal production and sales by 20%-30% in the next years. Corporate Secretary of PTBA Adib Ubaidillah said that PTBA has 8.27 billion ton of coal resources, as well as a 3.3 billion ton total coal reserves.
The improvement in coal price index has encouraged PTBA to start exporting coal with higher value of calories at around the levels of 4,800 to 5,000 kilo calorie per kilogram (Kcal/kg) since the second quarter of 2016. “Under the current index condition, PTBA has opportunities to secure high-calories coal reserves”, Adib told KONTAN on Wednesday (19/10).
As of the third quarter of 2016, the coal production of PTBA has grown by 7% to 15.3 million ton compared to the same period in 2015. Around 50% of the sales were allocated to local demands, while others for export purpose.
PTBA remains selective in implementing its business strategies. Adib said that the increase in the coal price does not necessarily require the issuer to boost the production to a maximum level. However, PTBA plans to acquire new mines in order to expand its business and to increase its coal reserves.
PT Adaro Energy Tbk (ADRO) and PT United Tractors Tbk (UNTR) also plan to launch business expansions. ADRO just completed the acquisition of 75% IndoMet Coal stocks, which worth of US$120 million, while UNTR has just acquired a worth of US$45.73 million of the stocks of a mining coal in Central Kalimantan province.
After a long absence, PT Garda Tujuh Buana Tbk (GTBO) has also started operational activities in a small scale since 13 October 2016. “The full operations will commence in November, after all equipments arrive at the mining location”, said GTBO Director Jones Manullang.
GTBO once halted its mining operation in a long period of time. However, after two to three years GTBO considered to acquire new coal mine. The company also plans to acquire a gold mine in Sudan. “To date, the exploration is run by the third party, which is appointed to conduct the acquisition”, Jones said.
Meanwhile, PT Bumi Resources Tbk (BUMI) claimed that the coal price will jack up the operational performance of the issuer. Director and Corporate Secretary of BUMI Dileep Srivastava expects that the company will increase the sales of coal by 7.2% to 85 million ton compared to the last year, despite the company is still restructuring its debts.
Analyst at Danareksa Sekurits Lucky Bayu Purnomo suggested issuers to be careful in launching business expansions, despite the coal price starts recovering. Lucky favors issuers with large amount of coal reserves and business diversification, such as PTBA and ADRO. The analyst also recommends the shares of ITMG. According to Lucky, the shares of the three issuers are still solid, while the prices stand at above of the performance of mining sector.
(Muhammad Farid/Translator)
