East Kalimantan province coal miners shares drop on bridge collapse

Monday, 05 Dec 2011

The Jakarta Globe reported that shares of Harum Energy and other Indonesian coal miners that operate in East Kalimantan province fell on concern that the collapse of the Kutai Kartanegara bridge into the Mahakam River would affect their profitability.

Mr Herman Koeswanto, an analyst at Mandiri Sekuritas, in a report sent to clients, said that "The Mahakam River is the largest river in East Kalimantan and has one of the most crowded coal barging traffic activities. This will affect almost all listed coal companies that are located in East Kalimantan."

He said that the most affected listed coal companies would be Harum Energy, Indo Tambangraya Megah, Sakari Resources and Bayan Resources. These companies, which do a lot of business in resource-rich East Kalimantan, use the Mahakam River to transport coal for distribution at a port from their facilities.

Mr Alexandara Mira spokesperson of Harum Energy said that "The closure will prevent us from transporting coal from our Separi port to our transshipment points in Muara Jawa and Muara Berau."

Ms Dileep Srivastava, Bumi Resources' investor relations director, said that "Our coal shipment for the month of November 2011 should largely be unaffected since almost all of the coal due to be loaded for the month has been barged past the affected section of Mahakam River. We have notified our customers of potential delays of future shipments resulting from the river closure. We expect to maintain normalcy of coal shipments from our dedicated ports to our valued clients."

Analysts in Jakarta, however, were not so sure that the disaster would have such a light impact on the companies.

Mandiri Sekuritas' Herman said that "This accident should affect the coal loading and deliveries activities that may incur demurrage cost for coal producers."

Ms Erindra Krisnawan, an analyst with CIMB Niaga, said that "As long as the evacuation schedule is not clear, we expect their stock to be pressured."

(sourced TheJakartaglobe)