One of Indonesia's coal producer PT Adaro Energy Tbk (ADRO) targets 80 million tons of coal production by 2015, almost double than output target this year of 45 million tons-46 million tons.
In a morning notes issued by PT Mandiri Sekuritas, to support the target, ADRO plans to build 68 km lenght of overland conveyor belt in stages and also to build 2x30 MW capacity of power plant located in mouth of the mining site.
The conveyor belt is scheduled to be initiated in early 2011 with capacity of 40 million tons and expected to contribute saving cost amounting to US$1.5 per ton to production cost.
The company produce 21.6 million tons of coal in the first half of this year or 47% of 2010's target. The stock trades at PER 10F-11F of 16.5x and 12.2x,
Disclosure: No position at the stock mentioned above.
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