Bumi on Track to Reach Full-Year Coal Output Guidance

By Alex MacDonald

LONDON--U.K.-listed Indonesian coal miner Bumi PLC (BUMI.LN) said Monday that it remains on track to reach its full-year thermal coal output guidance after boosting third-quarter production as it continues to cut costs amid weak prices.

Bumi said that thermal coal production from its 85%-owned PT Berau Coal Energy TK (BRAU.JK), Indonesia's fifth largest coal miner, was up 10% year-on-year at 6 metric million tons in the third quarter. As a result, output during the first nine months of the year rose around 16% to 17.5 million tons compared with the same period a year earlier.

The rise in coal output has put the company on track to produce 23 million tons of coal this year, the company said.

"We remain very focused on operational improvements and efficiencies, which is our priority in the current weak coal price environment," said Nick von Schirnding, Bumi's chief executive, in a statement.

The company has reduced its production cost of sales by 6% annually to $38.10 a ton over the first nine months of the year. It has also cut it capital expenditure to $50 million from $70 million for this year and plans to review next year's capital expenditure with a view to cutting that as well.

Bumi brought forward the publication of its third-quarter production report to Monday from Thursday in order to include it in an offer document that it intends to distribute to shareholders this week. The circular document will outline the terms of a proposed transaction to separate the London-listed miner from its major shareholder, the Indonesian conglomerate Bakrie Group, and Indonesia's largest coal miner, PT Bumi Resources Tbk (BUMI.JK), in which Bumi has a 29% stake.

-Write to Alex MacDonald at [e-mail]

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