(EnergyAsia, August 10 2012, Friday) — Indonesia’s second largest thermal coal producer, Adaro Energy, said it now expects to produce between 48 and 51 million metric tonnes in 2012, down from an earlier forecast of 50 and 53 million mt.
Citing “difficult market conditions” with coal prices down by more than 20% since last April, the Jakarta-listed company said its second-quarter production remained flat at 12.05 million mt, taking first-half output to just over 23 million mt. With coal reserves of 3.5 billion mt, the company produced 47.7 million mt last year.
Amid widespread reports of buyers defaulting on deals, Adaro said it has succeeded in placing all its sales volume for the year on fixed-price and index-linked contracts.
The company said that none of its coal has been sold on the spot market, suggesting its customers have honoured agreements.
“Our pricing strategy remains the same: selling our coal at a competitive price and in accordance with prevailing Indonesian regulations on the Indonesian coal reference price or Harga Batubara Acuan (HBA),” it said.
“We continued to maintain good relationships with our customers and none of our coal shipments were deferred. To provide more options to our customers, we introduced a new product, E4500, which is a blend between E5000 (Tutupan) and E4000 (Wara). We sold 510,000 tonnes of E4500 to two customers in South Korea and Indonesia.”
Adaro, which has invested a total US$744 million to acquire coal deposits and a logistics company since 2010, said:
“We are carefully monitoring our spending to preserve cash and help maintain margins. We will continue with our investments to improve efficiency and create reliable, safe, long-term growth.”