UPDATE 3-Coal miner Bumi says output on track after Q3 jump

* Q3 group production up 35 pct to 23 mln tonnes

* Berau Coal sales up 20 pct to 5.5 mln tonnes

* Realised prices for Q3 of $94 per tonne, up 32 pct

* Shares up 1.8 percent

By Clara Ferreira-Marques and Lorraine Turner

LONDON, Nov 17 (Reuters) - Coal miner Bumi Plc , a venture between financier Nat Rothschild and Indonesia's Bakrie family, said it was on track to hit its 2011 output goal after a 35 percent rise in third-quarter production, with prices ahead of expectations.

Indonesia-focused Bumi, which made headlines recently as tensions rose between key shareholders, on Thursday announced the planned repayment of $482 million of short-term investments to part-owned PT Bumi Resources as part of efforts to cut its $3.2 billion debt.

A $251 million loan from PT Bumi to Bukit Mutiara, a holding company, will be fully repaid by 2013, while a $231 million investment with private equity group Recapital would return to PT Bumi next year.

Both Bukit Mutiara and Recapital are connected to Indonesian investor and Bumi shareholder Rosan Roeslani.

Bumi Plc said the two moves, added to the refinancing of a loan from China Investment Corporation (CIC) announced earlier this month, would cut the annual cost of PT Bumi's debt burden by $100 million. The average rate of interest on PT Bumi's debt is close to 12 percent, the company said.

Debt reduction and the need to clear up "non-coal" deals were, along with the need for improved corporate governance, central points in a leaked letter sent last week by Rothschild to Ari Hudaya, chief executive of both Bumi and PT Bumi. But Bumi said the repayment was agreed on Oct. 12, well before the public broadside from the financier.

Bumi shares were up 1.8 percent at 1535 GMT, outperforming a 2.5percent drop in the broader mining sector, hit by fresh European worries.

"Bumi is firmly on track to meet its full-year coal production targets and its expansion plans are well under way," Evolution analyst Louise Collinge said. "The progress being made to strengthen PT Bumi Resources' balance sheet is also very encouraging."

PRODUCTION BOOST

Bumi Plc, which bills itself as the world's largest thermal coal exporter, said production rose 35 percent to 23 million tonnes in the three months to September. That took nine-month production to 62 million tonnes, closing in on a 2011 target of 86 million tonnes.

Realised prices for the quarter averaged $94 per tonne, up almost a third on the 2010 period.

Nick von Schirnding, head of investor relations, said the group had benefited as Chinese appetite for thermal coal picked up, while Indian and Japanese demand remained robust.

"The overall supply-demand picture for thermal coal remains robust. We are now selling coal into the first quarter of next year, and most recently we achieved pricing into Asia at over $130 a tonne," he said, adding current prices were sustainable.

Subsidiary Berau, 85 percent owned by Bumi, saw sales volume rise 20 percent in the quarter, compared with last year, while coal output increased 23 percent. Berau's 2011 output target is on track and its longer term expansion plan is on schedule.

Bumi Plc's prize asset is the 29 percent stake in Jakarta-listed PT Bumi, which controls the KPC and Arutmin coal mines, where production rose 29 percent and 71 percent, respectively.

Relations between Rothschild and his Indonesian partners have deteriorated in recent weeks, with the leaked letter from Rothschild last week calling for a "radical cleaning up" of PT Bumi seen as a show of frustration.

The Bakries have since gone public themselves with their own criticism of Rothschild's broadside.

Bumi Plc, which began life as Rothschild vehicle Vallar, gained a full London listing earlier this year.

Its shares have since dropped more than 20 percent, slipping below 850 pence in September in a dip that triggered the mandatory repayment of a key loan and almost forced the Bakries into default. They eventually signed a deal earlier this month to sell half their stake.