Indo Tambang Raya Allocated Jumbo Capex In 2024

JAKARTA - Coal issuer PT Indo Tambangraya Megah Tbk (ITMG) will allocate a larger capital expenditure (capex) in 2024 in line with plans to increase production and sales. Junius Prakarsa Darmawan, Finance Director of ITMG, said that the capex allocation in 2024 is still being finalized. The capex value is likely to double from the estimated capex in 2023. In 2023, ITMG's capex estimate reached US$44.4 million. ITMG has absorbed US$26.7 million or equivalent to Rp413.5 billion (Jisdor exchange rate of Rp15,487 per US dollar) until 9 months of 2023. "Capex 2024 is still being finalized, maybe the total is double this year's estimate of US$ 44 million," he explained in Pubex Live 2023, Thursday (30/11/2023).

    The large capex allocation is for the development of several new mines, infrastructure improvements at the existing mine in the Melak area, East Kalimantan, to the development of jetties (ports) to anticipate additional coal production in the future. Some of ITMG's coal mining projects that are not yet operational are PT Nusa Persada Resources (NPR), PT Tepian Indah Sukses (TIS), and PT Graha Panca Kars (GPK). Meanwhile, of the US$26.7 million capex realization as of September 2023, most of this capital expenditure was absorbed by ITMG's coal business with a total of US$15 million. In detail, the Trubaindo mine absorbed US$5.6 million in capex. Then, US$4.7 million capex was absorbed by the Bharinto mine, US$4 million was absorbed by the Indominco mine, and the remaining US$0.7 million by the Jorong mine.
    Then, other ITMG businesses such as TRUST absorbed capital expenditure of US$7.1 million, greenfield projects absorbed capital expenditure of US$1 million, renewable or renewable energy projects amounted to US$2.6 million, and others amounted to US$0.9 million. Yulius Kurniawan Gozali, Director of ITMG, said that until the end of 2023, the company is optimistic to achieve its coal production target of 16.9 million tons and sales of 21.1 million tons. Some 77% of ITMG's coal price is fixed, and 23% is floating following the global coal price index.
     As of September 2023, ITMG's coal sales reached 15.3 million tons. China is the largest market at 5.4 million tons, Indonesia at 3.6 million tons, Japan at 1.9 million tons, the Philippines at 1.2 million tons, Thailand at 800,000 tons, and other countries in Asia Pacific and Europe. "For the [production and sales] target in 2024, it is expected to tend to increase because the coal market potential is still stable and promising," he added.

New Mine

    Meanwhile, ITMG plans to operate one stone mine in 2024, PT Graha Panca Karsa, thus adding to its production portfolio. Mulianto, President Director of ITMG, said that in 2024 the company will operate one new mine, Graha Panca Karsa (GPK). GPK coal production is expected to reach 1 million tons next year. "GPK production is expected to reach 1 million tons in 2024, then grow gradually to 2 million tons in 2025, and 3 million tons in 2026," he explained.
    "GPK's production is expected to reach 1 million tons in 2024, then grow gradually to 2 million tons in 2025, and 3 million tons in 2026," he explained. GPK has a calorific value of 3,600-3,800 Kcal/kg with ash levels of 8%-11%, sulfur of 0.1%-0.2%, and total moisture of 36%-38%. According to Muliato, low sulfur is an advantage of GPK's coal products so that it can be mixed with ITMG's coal portfolio at other mines.GPK has a concession of 5,060 hectares (ha) in East Kalimantan. It is located 14 km from Bunyut Port, making transportation easier. "With more diversified products, ITM will be able to meet the various qualities required by customers in both domestic and export markets," he added.


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