Jakarta: Indonesian coal miner Bayan Resources Tbk has signed a deal with India’s Universal Crescent Power Private Ltd to supply 100 million tonnes of coal over 15 years from 2015, the firm’s chief financial officer said on Friday.
“It’s an index linked contract based on the Newcastle index (and) is fully compliant with the minimum pricing regulation,” Alastair McLeod told Reuters. “It’s not a fixed price contract, and so it will vary every month on delivery of the contract.”
In late May, Bayan, Indonesia’s eighth-largest coal producer, said it was aiming to more than double its annual output to as much as 25 million tonnes by 2013 to meet rising demand from consumers such as India.
The company produced 11.9 million tonnes of coal last year and expects output to rise to between 14.5 million and 15.5 million tonnes in 2011.
“It is a further expansion that will be required,” McLeod said of the India agreement.
“We have already got some debt facilities in place although they’re pretty much fully utilized,” adding that the company is looking to raise additional debt in the latter part of this year or beginning of the next year to fund the expansion.
Bayan is 20% owned by Korea Electric Power Corp and has open-pit mines located in East Kalimantan.
The firm exports most of its coal to countries and regions that include Europe, Taiwan, Malaysia, Japan and South Korea.
India, Asia’s third-largest economy, is the biggest market for Bayan by volume, accounting for about 30% of all exports.