Coal mining and trading business line are run by PT Golden Energy Mines Tbk (“GEMS”) and its subsidiaries, as well as PT Andalan Satria Lestari (“ASL”) and its subsidiaries. Major coal concession areas owned by GEMS, ASL, and their subsidiaries are located in South Kalimantan, Central Kalimantan, Jambi, and South Sumatera.
The company successfully recorded coal production of 23.9 million tons in 2018, an increase of 43.1% compared to the achievement of previous year’s coal production. The actual coal production exceeded the target of 23.8 million tons.
As much as 84.8% of the total coal was produced by PT Borneo Indobara, as much as 10.0% was produced by other subsidiaries of GEMS, and as much as 5.2% of the total coal was produced by mining activities of ASL’s subsidiary entity to meet the needs of IPP PLTU Sumsel-5.
Total coal sales volume achieved in 2018 was 24.4 million tons, an increase of 42.7% over the previous year’s 17.1 million tons. Total revenues from coal business recorded in 2018 amounted to USD 1.04 billion, increasing 37.8% if compared to revenues from coal business in the previous year which amounted to USD 759.4 million. Revenues from coal business contributed 59.2% to total consolidated revenues of the Company in 2018.
Coal business prospect is predicted to face challenges in 2019. Oversupply of coal, coal import restriction by China government, and decrease in coal demand from India is predicted to provide unfavourable effect to coal mining business in 2019. In line with the development of power plants in Indonesia, the Company also explores the opportunity to sell the coal to coal-fired power plants, as well as to fulfill domestic market obligation. The Company expects that the coal demand in domestic market will continue to grow in-line with the development of new coal-fired power plants.