Indonesia's PTBA on track to meet its 42 mnt coal output target

Mysteel Global: PT Bukit Asam (PTBA), a key coal mining group in Indonesia, aims to produce 42 million tonnes (mnt) this year, buoyed by a strong first half that saw output reach 25 mnt, the company's president director Arsal Ismail told CNBC Indonesia on the sidelines of Coaltrans Asia 2024 in Bali.

Parallelly, coal sales in H1 jumped 15% y-o-y to around 20.1 mnt, marking a five-year high for the same period, Mysteel Global learned from the company's historical data. Of these sales, about 12.5 mnt were earmarked for domestic users and the remainder for overseas buyers.

PTBA's confidence in its production projections is further boosted by the Indonesian government's approval of its Work Plan and Budget (RKAB) through 2026. The RKAB, a production quota-like essential document for normal operations of Indonesian mining companies, outlines a company's production and sales volumes, as well as infrastructure development and community programmes. A regulation passed in September 2023 extended the RKAB's validity from one year to three years, providing higher business certainty for mining firms.

With the RKAB in place, the company, based in Tanjung Enim in South Sumatra, aims to ramp up coal production to 50 mnt during 2025 and further to 60 mnt in 2026, said Ismail. This compares with its 2024 production guidance of 41 mnt.

PTBA produced 41.9 mnt of coal in 2023, surpassing the 41 mnt target set at the beginning of the year. Meanwhile, it sold 37 mnt of coal last year, with 21.4 mnt placed domestically and 15.6 mnt overseas, the company reported on its website last January.

Despite being the top buyer of Indonesian coal, China is not a major customer for the company. According to a report on coal sales in H1 2022 issued on the miner's website, China only contributed 2% of PTBA's total sales during those six months, far below its domestic sales, which accounted for 65% and India's share of 18%.