Indonesian mining group Bumi took a break from board room squabbles to push out a third quarter report for its Berau Coal subsidiary, which showed coal production was up while sales were down.
Berau Coal, which is 84.7% owned by Bumi, mined 5.5m tonnes of coal in the third quarter, up 4% from the 5.3m tonnes mined in the corresponding period of 2011 but unchanged from the preceding quarter.
Third quarter sales were down 12% to 4.8m tonnes from 5.5m tonnes the year before, and were also down on the 5.3m tonnes sold in the second quarter of 2012.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
The free on board (FOB) average selling price during the third quarter of the current year eased to $71.30 a tonnes from $86.40 a tonne a year earlier and $75.20 a tonne in the preceding a quarter.
Latest Videos FromMoneyWeek
At the same time, production costs per tonne rose. The third quarter production cost per tonne was $41.10, up from $38.70 a year earlier and $41.00 in the second quarter of 2012.
The independent investigation commissioned by the board into alleged financial irregularities in Bumi's Indonesian operations, especially in relation to PT Bumi Resources, in which Bumi has a 29% interest, continues. Until such time as the findings of the investigation become apparent, the board will be holding fire on making any recommendations regarding changes in practice.
The group has been beset by internal strife, with a series of clashes between major shareholder, the Bakrie Group - controlled by the Bakries, one of Indonesia's wealthiest and most influential families - and another of Bumi's original backers, financier Nat Rothschild. On October 16th Rothschild resigned from the board of Bumi, saying he had lost confidence in the management's ability to stand up for investors.
That followed less than a week after the Bakrie Group attempted to solve the Gordian knot of cross-shareholdings at Bumi with an offer to swap its stake in the group for a stake of equivalent value in Bumi Resources, a subsidiary of Bumi.
In addition, the Bakrie Group also made a conditional proposal on October 11th to buy back the remaining 18.9% shareholding in Bumi Tbk for cash before Christmas 2012, and made a conditional proposal to make a cash offer within the next six months for the company's 84.7% shareholding in PT Berau Coal Energy Tbk.
Bizarrely, the independent non-executive directors of Bumi appointed Rothschild Group, the banking group founded by the Rothschild family, of which Nat Rothschild is a member, to evaluate the Bakrie proposals.
JH
