Top financials and reserves boost for Bumi

Indonesia’s largest coal producer PT Bumi Resources, has reported its best-ever quarterly financial results – alongside a near-one-third boost to coal reserves at its Kaltim Prima Coal concession in east Kalimantan.

Bumi says it has discovered an additional 442Mt of coal reserves in the Pedayak region of its KPC concession, opening the way for the company to add 31.5% more to its JORC-standard tally within two months – to 1.844Bt.
The planned Pedayak mega-pit will cover an area of 2,400hawith mining down to 300m and Bumi says “there are strong indications” that it will be able to increase the marketable reserve potential of the three other mining sites within the KPC concession.
In financials, despite production cash cost increases and a dip in total coal sales volume for the first quarter of this calendar year, Bumi is reporting strongest-ever results, led by net income (on a 100% basis) increasing 89% year-on-year to US$151.9M.
While total sales volume fell by 14% to 12.5Mt, compared with 14.5Mt in Q1 2007, this was offset by a 39% y-o-y FOB price increase during the quarter, to an average $57.95/t.
The group’s production cash cost increased 32% y-o-y during the quarter, to $30.70/t , an 18% increase on the FY 2007 production cash cost of $25.90/t.
Bumi says fuel costs contributed 29% to production cash costs, compared with 24% in FY 2007, while diesel prices during Q1 2008 increased 62% y-o-y, reaching $0.81/litre.
It says completion of a planned extra 100km of coal conveyors and a switch to captive coal-fired power plants for mine energy needs – scheduled Q4 of 2010 – is expected to cut group production cash costs by $3/t in 2011.
The group reports mining 12.8Mt of coal in the first quarter of this year, a 3% y-o-y increase, despite challenging weather conditions, while claiming its coal operations overburden removal reflected improved productivity, rising 13% y-o-y to 118.7Mt.
Its strip ratio rose 5% y-o-y during the quarter, from 8.8 in Q1 2007 to 9.3, reflecting an anticipated trend to a longterm average of 9.5.
Bumi says it remains on target to produce 64Mt of coal during this financial year and sales of 61Mt.
Recently, Bumi was reported to have won a 120% price increase on its thermal coal deliveries to some Japanese power utilities. The company will deliver 5Mt of thermal coal at US$132/t to some Japanese utilities, up from around US$60/t last year, while other Japanese utilities have signed supply contracts with Bumi priced at US$6/t above the globalCOAL benchmark index, Reuter says. The contracts are for coal with a calorific value of 6,322kcal/kg (GAR).
Bumi Resources Operating Performance
1Q 2008 1Q 2007 % Change
Coal Conveyed (MT) 12.5 13.9 (9.5)
Coal Sales (Mt) 12.5 14.5 (13.5)
Strip Ratio 9.3 8.8 (5.2)
Production Cash Costs (US$/t) 30.7 23.3 (32.0)
Average FOB Price (US$/t) 57.95 41.69 39.0

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