OREANDA-NEWS. Indonesian state-owned coal producer Bukit Asam is to buy back 650bn rupiah ($46mn) worth of shares in stages between now and December, amid plans to improve the management of its long-term capital and free up cash.

The decision follows a slump in Bukit Asam's share price on the Indonesian stock exchange, which has fallen by nearly 55pc from early September last year to Rp6,150 per share as of today.

In addition to reducing capital costs, the buyback will provide flexibility to help structure capital more efficiently, free up cash flow that can be used for business expansion plans, as well as increase earnings per share and return on equity, the company said.

Bukit Asam is diversifying into new areas of business, including power plant development along with chemical and coal processing, to help offset a an historical slump in coal prices. It currently operates more than 300MW of coal-fired generation capacity in Sumatra and is developing another 220MW that will use coal from the company's Tanjung Enim mine.

The company has also said it intends to raise its coal sales volumes by 33pc to 24mn t this year and to lift production by 30pc to 23.7mn t.