BUMI group : Arutmin Indonesia Profiles

The Company owns 99.99% of share in PT Arutmin Indonesia (Arutmin), after acquiring an 80% stake from BHP Minerals Exploration Inc. in October 2001 and the remaining 19.99% from PT Ekakarsa Yasakarya Indonesia in April 2004. In 1981, Arutmin was licensed to explore and mine coal in an area of 1,260,000 hectares comprising Block 6 in South Kalimantan, based on a first generation Coal Contract of Work (“CCOW”) which expires in 2019. The CCOW has been reduced and now covers an area of 70,153 hectares.

Arutmin is currently one of Indonesia’s most prominent coal mining companies which exports a substantial portion of its mined coal to international markets. It produces high quality bituminous Ecocoal in the Satui, Senakin, Batulicin and Asam - asam mines with high calorific substance and low to medium ash content. It is mostly used by industries and power plants. In addition, it also produces the more economical but lower grade Ecocoal product from its Asam-asam mines.

The total annual gross production at those four coal mines reached 15 million tonnes of washed and unwashed coal in 2004. The main contributors to Arutmin’s total coal production are the Satui and Senakin mines at a total annual gross production of 12 million tonnes with resources estimated at 30 June 2004 at 170 million tonnes of low sulfur thermal coals and over 250 million tonnes of sub-bituminous coals.

The coal mining operations of Arutmin are conducted by conventional open cut methods employing dozers, excavators, loaders and trucks. The coal products from the Satui and Senakin mines are transported by truck and are stockpiled at one of Arutmin’s four barge ports. The final products are conveyed from the barge ports to the North Pulau Laut Coal Terminal (“NPLCT”) at Tanjung Pemancingan by custom built, self-discharging barges or loaded directly onto ocean vessels at offshore barge transshipment anchorage.

In order to ensure consistent production of high quality coal to meet customer demands, Arutmin consistently performs tight quality control on its coal products during the entire mining process. This intense monitoring of coal product quality includes the implementation of a minimum of four prior quality checks as the coal moves from the coal face to the barge port stockpiles.

In 2005, Arutmin exported around 93% of its production of 16.8 million tonnes of high quality thermal coals to international markets. Arutmin predominantly exports its coal products to Japan and other Asian countries. To a lesser extent, it also exports its coal products to European and South American countries.

Arutmin’s main advantages are its competitive position in the global market, competitive cost structure due to the strategic Kalimantan location of its mines which are near to the coast and its brand name establishment due to its high coal quality.

Source : http://www.bumiresources.com