Indonesia’s PT Golden Energy Mines (GEMS), a coal mining unit of widely diversified Sinar Mas Group, has announced a flat coal output this year on low price, according to a company executive.
The company set its coal production target at 20 MnT this year, barely unchanged from its targeted coal production last year, Kontan newspaper reported citing Bonifasius, president director of the company as saying on Thursday.
Bonifasius attributed such flat production target due to low prices. Citing data from various sources, he said that the price of coal with calorific value of 4,200 GAR currently hovering in the range of USD 32-34/MT.
Should the price increase in the coming months, then the company may revise up its production target. He did not set elaborate.
“For the time being, our coal production target will be the same as of that of last year. Or should the price go up in the second quarter, and then we may raise our production target,” Bonifasius said without providing details.
Apart from low price, slowing demand from China has forced the company to remain conservative in its production target. And because of that, the company may shift its export market to India. Bonifasius said China accounted for 40% of the company’s production in the past years.
The company also target to sell its coal other markets such as South Korea, Vietnam and Malaysia.
The company has coal reserves of 630 MnT, enough for production over the next 30 years, the report said.
The company acquired four mid-size coal miners last year: PT Dwikarya Sejati Utama, PT Duta Surana Internusa, PT Unsoco and PT Barasentosa Lestari.
The company expects the four coal mining units would be able to produce a combined 800,000 MT of coal this year. Last year, those companies produced a combined 300,000 MT of coal with high calorific value, Bonifasius said.
The newspaper reported that the proportion of coal with high calorific value would increase in the long term. Currently, coal with high value calorific value accounts for 10% of the company’s total output.
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