Bayan Resources has declared force majeure on shipments from its own and from two units as a drop on water level make the main river impassable by coal ships.
The company issued the force majeure to one of its customers on March 1. Its units, PT Bara Tabang and PT Fajar Sakti Prima, followed suit, the Jakarta-listed Indonesian coal miner said in a notice posted on the Indonesian Stock Exchange website on March 5.
The force majeure was issued after water level at Kedang Kepala River, the only river used for shipping the power-station fuel to the main port, dropped to 3.16 meter, from the normal water level of 5.5 meter, the company said.
“The company and its two subsidiaries currently can’t fulfill coal shipments to customers as stated in the sale and purchase contract, until the water level at Sungai Kedang Kepala returns to the normal height that is passable safely by coal vessels,” it said in the statement.
PT Fajar Sakti Prima and PT Bara Tabang are two units in Bayan’s Tabang Concessions , which produced 24.8 million metric tons of coal in 2018 or 80% of the company’s total production, according to the company’s presentation posted on its website.
Bayan Resources is targeting to mine 32-36 million metric tons of coal this year, up from 31 million tons in 2018, the company said in its 2019 business guidance. Sales is anticipated to be in the range of 33-37 million metric tons with an average selling price anticipated to drop to be in the range of US$46-48/MT.
Land dispute case
In a separate notice to the bourse on March 5, Bayan Resources announced that its unit, Brian Anjat Sentosa, has won an appeal case regarding overlapping permits.
On March 1, Brian Anjat Sentosa received a decision by the Jakarta Administrative Court, which has ruled in favor for the company in a legal dispute against Kutai Kertanegara regent in Indonesia’s East Kalimantan province.
The Jakarta court’s decision supported an earlier ruling by Samarinda Administrative Court in East Kalimantan in October 2018, to revoke the palm oil plantation permits given by Kutai Kartanegara’s regent to two firms, Sasana Yudha Bhakti and Enggang Alam Sawita, Bayan said in the statement.
Brian Anjat Sentosa hasn’t been able to carry out mining activities in the disputed area, but it does not affect the company’s financial condition in 2018, the company added.
Sasana Yudha Bhakti said it will appeal to the Jakarta court’s ruling.
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