SINGAPORE listed coal miner, Straits Asia Resources (STRL.SI), said on Thursday the new coal loading facility at its Jembayan mine in Indonesia's East Kalimantan province has collapsed due to heavy rain.

The company did not say whether there were any casualties.

Straits Asia said it is investigating the extent of damage and the potential impact on the future operation of the newly commissioned facility. It said the facility will not be able to load its coal output for "some time".

UBS said in a research note that it might lower its valuation on the company if the disruption lasts longer than six months.

Straits Asia blamed the collapse on several days of rain in the area, which caused erosion and the failure of the foundation structure of the facility.

The company said the Jembayan mine site operates two load out trains at the mine, and the old facility, with a nominal annual capacity of 5.5 million tonnes, "does not appear to be affected by this event."

"All other mining activities at Jembayan continue to function normally and all reasonable steps are being undertaken to mitigate the impact of this event," the company said in a statement to the stock exchange.

Straits Asia, which exports most of its output to power plants in Japan, Korea, Taiwan and India, plans to boost its production from its two coal mines in East Kalimantan province to 9.5 million tonnes in 2009, from 8.6 million tonnes last year.

UBS analyst Andreas Bokkenheuser said in a note that the company should be able to achieve 8 million tonnes of output this year.

"If the loader won't be operational for another six months, our scenario analysis suggest a 10 percent downside from our current S$2.50 ($1.80) valuation to S$2.25," Bokkenheuser said.
very bad news for SAR...