Erick Thohir's Old Brother Company Records A Decline In Coal Sales In 2020

President Director of Adaro Energy, Garibaldi Thohir. (Photo: Doc, Antara)

JAKARTA - The mining company PT Adaro Energy Tbk (ADARO) posted a decrease in coal production and sales in 2020 compared to the realization in 2019. The issuer, led by Garibaldi (Boy) Thohir, produced 54.53 million tonnes of coal in 2020, or a decrease of 6 percent year-on-year (yoy).

"The volume of coal sales in 2020 was recorded at 54.14 million tons, or down 9 percent yoy", wrote Adaro's management on the information disclosure page of the Indonesia Stock Exchange (IDX), quoted by VOI, Wednesday, February 17.

Total overburden removal in 2020 reached 209.48 million bank cubic meters (Mbcm), or down 23 percent yoy, in line with the company's guidance to lower strip ratio this year.

Adaro Energy's strip ratio in 2020 was 3.84 times, below the guideline strip ratio of 4.30 times. The unfavorable weather throughout most of the year poses a challenge for the company to meet its strip ratio guidelines.

In the fourth quarter of 2020, Adaro produced 13.43 million tonnes and sold 13.39 million tonnes of coal, down 3 percent and 8 percent respectively compared to the fourth quarter of 2019.

Total overburden removal in the last quarter of 2020 reached 49.06 Mbcm, or a decrease of 21 percent yoy, resulting in a strip ratio of 3.65 times.

"The fourth quarter was marked by wet weather with high rainfall and long rainy hours in the main mining area since November", added Adaro's management.

Adaro's coal sales portfolio in 2020 is dominated by E4700 and E4900 products, which is supported by solid demand for these two types of coal.

The Southeast Asian market comprised 49 percent of 2020 sales, led by Indonesia and Malaysia. Increased demand also occurred from Thailand and Vietnam thanks to the operation of new power plants.

Target 2021

By 2021, Adaro Energy targets to produce coal in the amount of 52 million tonnes - 54 million tonnes, with a strip ratio of 4.8 times. From the financial side, operational EBITDA is targeted to reach 750 million - 900 million US dollars, with Capital expenditure (capex) of 200 million-300 million US dollars.

Previously, ADARO was conducting a study to develop the coal to methanol turnover business. ADARO has conducted various studies in terms of technology and concluded that gasification-based methanol production is suitable to be developed from the aspects of market certainty, volume and price.