JAKARTA (Yosefardi) – The Indonesia Stock Exchange (IDX) decided to halt trading in shares of coal mining and mining services company PT Garda Tujuh Buana Tbk and ask explanation from the company over the halt of its mining operation.
GTBO has decided to shut down its mining activity for period of at least three months starting from current month to April 2015, aimed to control cost and to protect its market. During this period the mining workers shall be laid off, barges contract shall be suspended.
Strong supply expansion and weaker demand growth in the coal market have the main drivers of current market weakness. However, despite initiatives to move away from coal in major consumers including China, longterm growth is strong. Indonesian costs have fallen 13% but margin are still squeezed due to lower prices.