S&P turns Bayan Resources view to positive

S&P said it revised PT Bayan Resources Tbk.’s outlook to positive from stable and affirmed its B+ issuer rating.

“We revised the outlook on Bayan to positive to reflect our view that the increasing visibility over the completion of its haul road and supporting infrastructure may facilitate an improvement in the company's scale and operational resilience,” S&P said in a press release.

Bayan started in 2019 constructing 100 kilometer haul road to connect the Tabang mine to the Mahakam River.

“In our opinion, this alternate route will reduce Bayan's reliance on seasonal rivers served by the Senyiur and Gunung Sari jetties, which are subject to weather-related disruptions, for barging coal. We believe the company is making good progress toward its target completion date of September 2022, having reached 30% completion as of June 2021. This will also improve Bayan's working capital, which tends to deteriorate during the dry season, given the seasonal inventory buildup,” the agency said.

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