Bumi Resources lowers sales target amid market pressures

first_imgTopics : “The effects of the [COVID-19] pandemic continue to be felt, impacting prices and demand in some of our markets,” Srivastava said in an official statement on Monday.The miner’s coal sales volume rose 3 percent to 21.5 million tons in the first quarter, but higher sales were offset by a 6 percent drop in prices to US$49 per ton, said Srivastava. Prior to the pandemic, Bumi expected coal prices to remain between $51 and $53 per ton.Bumi booked a $35.1 million loss in this year’s first quarter, down from $48.5 million in profit in the same period last year, the company’s latest financial report shows. To alleviate the impacts of the pandemic, Bumi is also looking into metal mining and chemical production. Through subsidiary PT Bumi Resources Minerals (BRMS), the company plans to intensify its gold mining in Palu, Central Sulawesi, and zinc mining in Dairi, North Sumatra, starting next year, according to Srivastava.The firm also plans to become one of the coal suppliers to a multi-billion dollar coal-to-methanol processing plant in East Kalimantan. Methanol is commonly used in biodiesel production.The plant, being developed by affiliated financing firm Bakrie Capital Indonesia (BCI), is estimated to require 6 million tons of coal each year once operational in 2024.“There is strong momentum for this project, which will produce high-value methanol from abundant, low-value coal reserves,” said BCI chief executive officer Adika Nuraga Bakrie, in a joint statement on May 15.Developing downstream mining industries is part of the government’s vision to capitalize on Indonesia’s underground wealth.The government, through the new Mining Law, even plans to guarantee mining permit extensions for coal miners that develop downstream operations.Bumi recorded a 97 percent drop in profit last year, one of the steepest among coal miners publicly listed on the Indonesia Stock Exchange (IDX).The company’s profits this year were also pinched by rising production costs, as the company raised its strip ratio – the volume of waste material removed to obtain a given volume of coal – to produce higher quality coal. Production costs rose 38 percent year-on-year (yoy) to $238.17 million in the first quarter. Raising its strip ratio contrasts with Bumi’s competitors PT Adaro Energy and PT Bukit Asam, Indonesia’s first and second most profitable coal miners last year, which lowered their strip ratios to cut costs.center_img Indonesia’s most productive coal miner PT Bumi Resources has lowered its sales target for 2020 after its profits dipped into the negative in the first quarter this year, amid continued global market pressures.The publicly listed firm aims to sell up to 90 million tons of coal this year, down from an initial target of 93 million tons, the firm’s corporate secretary Dileep Srivastava told The Jakarta Post on Tuesday.The lower sales target follows weakening coal prices and demand, particularly from partially-locked down India, Indonesia’s second largest coal buyer.last_img

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