+ Growth in production amid a slight drop in coal prices: Production from coal for 9M18 totalled 15.9mn tonnes (79.5% of 20mn tonnes of FY18 sales target).
HBA (Indonesia Coal Price Reference) had risen by 24.4% YoY to US$105.7/tonne in 3Q18. However, ASP for GEAR dipped YoY slightly due to the price cap on the coal supply to PLN. During the quarter, 1.2mn tonnes was supplied to PLN.
– Several factors led to a higher cash cost: In 9M18, cash cost jumped 22.2% YoY to US$26.4/tonne. The increase in the strip ratio of BIB mine (9M18:4.8 vs 9M17:3.7) accounted for US$1.6/tonne out of US$5 of increment in cash cost. The increase in fuel price, the distance between mining field and overburden dumping site, coal hauling, and port/jetty cost lifted the cost by another US$0.5/tonne, US$0.75/tonne, US$0.65/tonne, and US$0.6/tonne respectively. Full-year cash cost is expected to be c.US$26/tonne.