Indonesian coal miner Atlas Resources has set aside USD 50 million for capital expenditure next year, after cutting this year’s capex in half amid falling coal prices.
Mr Andre Abdi president and director of Atlas Resources said that funds will mostly be used to finance the construction of its second hauling road in Muba hub in South Sumatra, which was delayed this year. Some of the capex will also be used to acquire trucking services from a third-party contractor.
Mr Dono Boestami director at Atlas said that “Because of the declining coal prices we have to seek a lot of efficiencies, which led to the delaying of the construction of the second hauling road.”
Mr Boestami said that Atlas had cut this year’s capex by half. The company said earlier this year that its capital spending was set at USD 68 million.
The construction of the second hauling road is expected to resume in June. The current single hauling road in the Muba hub is used to transport coal to the company’s jetty.
Mr Aulia Setiadi, a director at Atlas, said that the Newcastle coal price index had declined about 30% so far this year while Atlas’s average selling price stood at USD 79 per tonne through September this year.
Mr Setiadi said that “For the full year, it may be lower than September, since the composition of lower calorie coal is increasing.”
Sales of the lower calorie coal increased as the company started selling coal to state electricity company Perusahaan Listrik Negara. Lower calorie coal nets lower prices for the company.
Mr Aulia said that the company expects the index coal price to be at USD 90 per tonne to USD 95 per tonne next year but cannot determine the average selling price for Atlas yet. It will be depend on the product mix because we sell low- to high-calorie coal.
