At one of the world’s largest coal mines in the Indonesian province of South Kalimantan, enough of the fossil fuel is being stolen every three days to fill a vessel almost the size of the Chrysler Building, according to two people with knowledge of the situation.
The illegal shipments are undermining global prices for thermal coal, already near a four-year low, and have prompted a London-listed stakeholder in the Arutmin mine run by Jakarta-based Bumi Resources to ask its lawyers to review the claims. The people who discussed the thefts with Bloomberg asked not to be identified because the details aren’t public.
Coal thefts across the Indonesian archipelago totaled about $6 billion last year, a local industry group estimates. Illicit mining at Arutmin is claiming about two million metric tons of coal each month, according to the people. Those volumes are valued at about $150 million at current prices and are bypassing a marketing contract for shipments with Glencore Xstrata, the world’s biggest exporter of the fuel, they said.
Bumi’s Arutmin mine is one of the key assets at the heart of an ill-fated venture founded by UK financier Nathaniel Rothschild and Indonesia’s Bakrie family, now known as Asia Resource Minerals, or ARMS.
ARMS owns 29 percent of Bumi and it asked law firm Macfarlanes LLP to assess allegations of illegal mining in January, three people said.
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