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Coal firms in Indonesia seek acquisition on strong demand
Expecting China's demand for overseas coal to stay strong in the second half, two coal firms in Indonesia are gearing up to raise production through acquisitions.
The Indonesian unit of Thai Banpu wants to acquire a coal mine in Indonesia to boost production, a company official was quoted as telling Reuters Tuesday.
Apimuk Taifayongvichit, chief marketing and logistics planner of the unit, PT Indo Tambangraya Megah, said it is looking for a mine in Indonesia's Kalimantan region.
Banpu has the capacity on its balance sheet to fund an acquistion, Apimuk told Reuters on the sidelines of Coaltrans conference.
Indonesian coal producer PT Bayan Resources is also actively looking at acquisitions to help boost production. Indonesia's Adaro also said China's demand for overseas coal was expected to stay strong in the second half of this year.
"From the signs we've seen, going forward, we can only say it is still looking strong in the second half," said Alastair Grant, Adaro's marketing director.
Grant said Adaro was expecting to increase sales to China to about 3.5 million tonnes in 2009, compared with about 2 million tonnes last year. He added that the bulk of that 3.5 million tonnes volume had already been contracted.
Indonesia's largest coal miner, PT Bumi Resources Tbk, said on Monday it had sold about 8 million tonnes of coal to China for delivery in 2009.
Banpu's unit in Indonesia, PT Indo Tambangraya Megah, which also has stakes in power plants in China, said some utilities in southern China have been increasing their coal purchases since April as they step up power production.
"As long as there is a difference between domestic and import prices, China will still be buying coal from overseas," Apimuk Taifayongvichit said at the Coaltrans conference in Bali. "And we do not expect domestic prices to tumble."
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