Subhashish Datta

The Owner of Dynamic & Diverse Finance Acumen

Subhashish Datta

Chief Financial Officer

PT Kaltim Prima Coal

At the backdrop of the COVID followed by Russia-Ukraine conflict, the global coal industry found itself buffeted by unprecedented challenges. Market volatility, regulatory uncertainties, and geopolitical tensions created a perfect storm, requiring astute leadership to navigate the turbulent waters. The coal industry, deeply affected by these global events, witnessed fluctuating coal prices, demand-supply imbalances, and dynamic market shifts. Amidst this chaos, Subhashish Datta, the CFO of PT Kaltim Prima Coal, emerged as a stalwart captain, steering his company with wisdom and innovation. Subhashish recognised the urgent need for strategic adaptation.
Subhashish’s coal industry journey began at Thiess Minecs and led to his pivotal role as CFO at KPC, representing Tata Power’s 30% stake. His expertise was honed through positions in esteemed companies like Coastal Gujarat Power Limited (merged with Tata Power), Thiess Minecs, TRF (part of Tata Steel), where he managed intricate financial aspects. At KPC, Subhashish navigated challenges by optimising production costs and emphasising operational efficiency and sustainability. He implemented stringent financial controls, ensuring compliance, and pioneered innovative eco-friendly initiatives. Notably, his innovative financing strategies, including close collaboration with equipment manufacturers and channel partners, ensured stable funding and strategic alliances, bolstering KPC’s industry position.
Under Subhashish’s financial leadership, PT Kaltim Prima Coal thrived from strength to strength, played a pivotal role as a key player in the mining industry. His foresight, honed by experience, transformed challenges into opportunities, guiding the company towards a future defined by innovation and strategic brilliance, as discussed in TradeFlock’s interview.

What unique financial challenges do you face as a mining industry CFO, and how do you ensure financial stability and growth for the company?

Amidst the challenges of 2022–23, we navigated plummeting coal prices, regulatory shifts, and supply chain vulnerabilities. Emphasising cost optimisation, we managed strip ratios, overburden distance, fuel burn ratio and adopted value-based orders, leading to a historic turnover and profit of $6.7 billion and $1.2 billion respectively in 2022. To ensure our success, we embraced a mine-to-market digitalization initiative, enabling real-time monitoring and cost analysis. Collaborations with equipment manufacturers secured stable, long-term financing, ensuring consistent operations amid market uncertainties. This multifaceted approach solidified our financial resilience.

How do you navigate Indonesia's complex mining regulations to ensure financial compliance and competitiveness in the market?

In Indonesia, regulatory changes are frequent, impacting aspects like royalty and tax rules, requirement of 30% deposit of export proceeds, etc. We remain vigilant about these uncertainties when devising strategies, always anticipating potential shifts. Our approach involves building flexible systems adaptable to regulatory changes. For instance, the formula for HBA (Harga Batubara Acuan) has recently changed, challenging our margin and royalty calculations. We constantly track potential regulatory shifts, ensuring our organisation remains agile and responsive to evolving regulations, thus ensuring compliance while preserving competitiveness.

What are your retirement plans and potential future roles in the coal industry after over a decade of service?

The coal industry, being close to my heart, holds deep significance for me, and I remain passionate about my work. Advancements like carbon capture and storage and alternative coal use intrigue me, offering potential avenues for contribution and I am open to exploring new roles in the evolving industry landscape . While retirement plans are personal, I envision leveraging my expertise and industry knowledge continues to benefit others even after my full-time engagement cessation, as and when happened.

Balancing innovation and risktaking is crucial. How do you go about it?

We prioritise positive cash flow in our day-to-day operation. By focusing on cost optimisation and excellence in operation, adopting marginal cost-based orders, we mitigate losses after royalty and other logistic payments. Encouraging a cost-conscious mindset among our team is pivotal. Currently, we’re collaborating with McKinsey for mineto-market digitalization, with 60% of KPC’s operations already digitalized. This approach ensures adaptability, allowing us to innovate while maintaining financial stability.

How does your company align financial planning with ESG factors and ensure operational efficiency, profitability, and environmental standards in mining operations?

We integrate ESG requirements into our business and financial planning by reducing emissions and enhancing carbon sequestration. This aligns with the evolving ESG landscape. Simultaneously, we optimise operational efficiency by hiring equipment, monitoring fuel usage, ensuring quick receivable realization, and maintaining profitability, safety, and environmental standards in mining operations.

How is your organisation preparing to adapt and thrive amid potential financial disruptions, especially concerning net zero emissions challenges?

We have adapted by opting for long-term equipment hire agreements, ensuring steady machinery updates without substantial capital infusion. Emphasizing coal’s continued relevance, we focus on team motivation, ethical and governance practices, preparing us to navigate disruptions effectively while aligning with environmental goals. Our financial strategies focus on innovation, researching emerging technologies and alternative coal uses to stay ahead. We’re forging strategic partnerships with manufacturers, channel partners and banks for stable financing. Investing in workforce development, enhances skills, while sustainable practices reduce our carbon footprint, ensuring environmental contribution alongside financial stability.

Subhashish Datta