JAKARTA (TheInsiderStories) – Indonesian coal miner, PT Indo Tambangraya Megah Tbk (ITMG) entered mineral resources businesses due to the gloomy coal business amid the pandemic. For the planned, the company will use the capital expenditures has prepared US$50 million in this year.
“Yes, we see that possibility to see other mineral products,” said the president director, Mulianto, in a virtual public expose on Tuesday (08/25) by adding during the pandemic, the price of coal continues to declined while the demand for the commodities such as gold was rising.
In the first half (1H) of this year, Indo Tambangraya‘ net profit fell 57 percent to $29.8 million from previous year stood at $70.8 million. While, the net sales fell 27 percent from 892.7 million in the 1H of 2019 to $652.6 million in 1H of 2020.
The management said, the issuer continues to adapt the global economic uncertainty in order to maintain a decent performance. World economy, he said, was marked by an ongoing trade war between United States and China.
Disagreement about how to end the trade dispute between two superpowers has placed global economy under pressure resulting in a decline in global coal demand. On the other side, coal supply has been increasing faster than the demand has, making global coal price continue weaker.
To cope with global economic uncertainty this year and beyond, Indo Tambangraya will focus on several aspects like cost efficiency initiatives, business expansion, and leveraging infrastructure network to create business opportunities outside coal operation.
Recently coal miners such as PT Indika Energy Tbk (IDX: INDY) and PT Bayan Resources Tbk (IDC: BYAN) announced to cut its production target caused the impact of the COVID-19 has affected the economy and global demand. Initially Indika targets the production could reached 30.95 million tones (MT) of coal.
While, Bayan was announced to adjust the production from 31 MT of coal to 26 MT of coal by the end of the year due to the pandemic. The company assesses that there is a weakening demand for both, export and domestic, that will affect the company’ financial performance.
In this year, the government has targeted 155 million MT of coal sales for domestic market obligation (DMO) ini this year. But, the MEMR is optimistic that all domestic needs will be met from national production, despite a decline in demand as a result of slowing industrial operations due to the global pandemic. Based on the ministry data, the realization of DMO reached 31.53 MT of coal or 20 percent of the 2020′ targets.
Even so, the government continues to ensure that coal demand for various domestic industries can be met from domestic production, even in the midst of a pandemic. This is because coal production is still in accordance with the established plan so that supply is maintained.
The ministry also considering to changes the coal production quota in 2020 to improve the price of coal. The government targeting the quota target of 530 MT of coal, but now the production has exceeded the targets around 550 MT of coal. The ministry has raised the quota of another 60 MT of coal to match the realization of 2019′ production of 610 MT of coal.
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