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Friday, 22 June 12
PRESENT SPOT WEAKNESS IS TEMPORARY, SEASONAL AND RISE AS WINTER APPROACHES - BUMI


COALspot.com - PT Bumi Resources Tbk, the world’s one of the largest coal producer and Indonesia’s largest multi grade coal miner has no plan to review their existing expansion plan for 2013  due to current coal price weakness. According to Dileep Srivastava' company’s corporate secretary’s E-mail note Bumi will stand on their 2013 expansion plan without any change.

"We view present spot weakness as temporary, seasonal and rise as winter approaches", Dileep shows his optimistic on future coal prices.

Bumi is also planning to drop strip ratio to 10:1 this year (vs 11.5:1 last year) to keep their production cost under control. Bumi supplies 20% of its total production to domestic market and remaining 80% for export market.

“Japan, India & China are account for 50% of our exports. Taiwan, Hong Kong, South Korea, Malaysia and  Philippines are the rest with some to Europe”, he replied in E-mail.

Due to sudden dropped in coal prices there were number of cancellation or delay in performing coal shipments including re-negotiation on contracted prices from Indonesia. However, Its seems that, BUMI has not affected delays or cancellation. “A shipment delay or two (including local) but no request for re-pricing” Bumi’s note says.

According to Dileep, Bumi’s 67% of year '12 estimated production (of 75 m tons) has been contracted at fixed price. The contracted price was at around +$85/ton FOB. The remaining 15% of quantity has been sold index linked price (GCNEWC index (global Newcastle) for Asia Market) with a fixed premium.
(updated on 23/6/2012 - 00:08 SG time)



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