Indonesian Bumi Resources' 2016 coal output rises 6.5% on year

Indonesian Bumi Resources' 2016 coal output rises 6.5% on year

Major Indonesian producer Bumi Resources produced 86.5 million mt of coal in
2016, up 6.5% from a year ago, even as its average selling price, or ASP,
fell 6%, the company said in a statement Thursday.

The company's ASP for the year stood at $42.10/mt, down from $44.80/mt the
previous year, the company said, citing market conditions and execution of
previous contracts.

However, ASP for the latest fourth quarter stood at $47.70/mt, up 13.3% from
$42.10/mt in the year-ago period.

Thermal coal prices surged in the latter half of 2016, mainly driven by
Chinese demand and supply tightness at various coal-producing regions.
"Outlook for coal price in 2017 is optimistic," Bumi's director Dileep
Srivastava said in the statement.

Bumi is expecting to boost production by 5%-7% in 2017, and expects ASP to
be at least 30% higher than 2016.

As much as 60% of the sales volume for 2017 is already committed, the
company said, adding that it expects to secure commitment for as much as 75%
by the end of the first quarter with the finalization of annual contracts
with Japan.

Bumi has majority equity stakes in major Indonesian coal producers Kaltim
Prima Coal and Arutmin. KPC and Arutmin produce steam coal with a heating
value of 4,200-7,100 kcal/kg gross air dried, according to Bumi's website.

Combined coal sales for the full year jumped 10.6% to 87.7 million mt, the
company said. Arutmin's sales surged 15.3% year on year to 28.6 million mt,
while KPC's sales rose 8.4% to 59.1 million mt.

Production cash cost fell 10% year on year in 2016 to $27/mt, mainly driven
by lower operating costs and higher production rate at an Arutmin mine, the
company noted.

The 90-day price of FOB Kalimantan 5,900 kcal/kg GAR has surged 59% since
January 2016 to be assessed Wednesday at $75/mt, according to S&P Global
Platts data.

KPC is also developing three coal-fired power plants, each 18 MW, one of
which is already stabilized and the other two are likely to be commissioned
between March and the end of this year.

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com