PT MNC Energy Investment Tbk (IATA) aims to increase its coal production in 2023 to reach 7 million tons, supported by its Capital expenditure (Capex). The company, however, did not reveal the amount of its Capex.
Established in 1968 under the name of PT Indonesia Transport & Infrastructure, the company focused on air transport service before switching to an investment company mainly in the coal mining industry. The company is part of the MNC Group, owned by Hary Tanoesoedibjo.
Currently, the company has subsidiaries as follows:
- PT Bhakti Coal Resources 99.33%;
- PT Global Maintenance Facility 86.94%;
- PT Indonesia Air Transport 99.99%;
- PT MNC Infrastruktur Utama 99.99%.
Coal target increase and Capex for 2023
MNC Energy has allocated its Capex for land acquisition and construction of roads and ports.
“[The Capex figure] is fluid, depending on the situation,” said company’s Head of Investor Relations Natassha Yunita on January 5, 2023.
The company has set its target of increasing the coal production in 2023 to reach 7 million tons. It plans to surpass the 2022’s coal production. According to Kontan.co.id, IATA received a realization of coal production in Q4 2022 worth 4.22 million tons.
Most of the work plan and budget of subsidiaries had been accepted by the Ministry of Energy and Mineral Resources, said Yunita.
IATA has projected price for its coal of US$ 50 per Metric ton (Mt). The company predicts that it will receive a revenue of US$ 350 million with its 7 million tons of coal production. It is also projected that IATA’s production will increase considerably with the additional mining permit (IUP) to be able to receive coal contracts.
The company’s financial report stated that it recorded a US$ 166.6 million revenue during January-December 2022, a 130.22% increase on the year-on-year (YoY) compared to the same period in 2021 of about US$72.36 million.
Meanwhile, its profit had seen a good performance with an increase of 166.62% YoY from US$17.18 million in January-November 2021 to US$ 45.83 million in the same period in 2022.
Risk in coal mining industry
The coal export ban policy in the early months of 2022 has affected coal price. Until the end of 2022, the trend showed the steadily increasing coal prices, explained Roza Permana Putra, President Director of PT Golden Eagle Energy Tbk (SMMT) during a public expose on December 16, 2022.
The year-long Russia-Ukraine war has kept coal prices high, which has caused high demand volatility and global commodity prices in the market. On the other hand, coal demand in Europe has been increasing due to the freezing temperature during winter and limited energy cuts from Russia.
