Harum, Bayan see coal delays after bridge collapse

Tue Nov 29, 2011

JAKARTA Nov 29 (Reuters) - Indonesian miners Harum Energy and Bayan Resources said on Tuesday that they expected delays to their coal deliveries from Borneo island after a bridge collapsed at the weekend, blocking a river used for barge shipments.

"For now ships are not allowed to go across the collapsed bridge area," said Harum Energy spokeswoman Alexandra Mira, adding that the company had notified buyers about the possibility of rescheduled shipments.

She did not give any estimate regarding the volume or length of the likely delay.

Harum's share price fell 5.5 percent on Monday on concerns it would be affected. It rose 0.7 percent on Tuesday.

The delays from the world's top exporter of thermal coal are not seen lifting regional coal prices, given an oversupplied market and concerns about weak demand.

Bayan's coal barging of 20-25,000 tonnes per day along the river from its mine to a port was affected, said Jenny Quantero, a director at Bayan.

An eyewitness said barges were unable to cross the area on Tuesday because of rescue team efforts after the 700-metre suspension bridge on the Mahakam river in Kalimantan collapsed on Saturday, killing at least 18 people.

Indonesia's major coal firms Bumi Resources and Adaro Energy said their shipments were not affected because they did not use the river, though Bumi warned it could be a problem for the industry if the delays continued.

"This may significantly impact transportation of coal at many coal producing mines in the area," Bumi said in a statement.

Brokerage CIMB said that the disruption would only be clear after a safety review in a week's time.

The Mahakam river accounted for around 15 percent of Indonesia's production, so a three-week stoppage could cut three million tonnes, it said.

It said the river each week carried all of Harum's volume of 200,000 tonnes, 158,000 tonnes from Indo Tambangraya Megah and 180,000 tonnes from Singapore-listed Sakari Resources.

CLSA put the potential volume at 20 percent of Indonesia's output, though said firms usually carried three to four-week stockpiles at mines and ports.

"Any outage beyond four weeks could affect Indonesia's coal production by up to 5.7 million tonnes per month," CLSA said in a report.

(sourced Reuters)