Borneo Seeks to Acquire Thermal Coal Mining Rights in Kalimantan

Thu, 25 January, 2012

Borneo Resource Investments Ltd. (OTCPK: BRNE) said it seeks to acquire highly prospective thermal coal mining rights primarily in East Kalimantan, Indonesia, a highly-stable mining jurisdiction.

"Our objective is to add value through grassroots exploration and target refinement and then seek option or joint venture partners through to production," Borneo Chairman and CEO, Nils Ollquist commented.

Borneo's business model is that of a Project Generator and coal trader. The Project Generator model is particularly suited to the company's ongoing interest in the East Kalimantan province where Borneo has a wealth of intellectual capital and experience.

To add to cash flow and reduce the need for dilutive financings to fund its activities, Borneo engages actively in coal trading. Management seeks to identify and broker transactions between buyers and sellers, earning a profit as the intermediary.

The company currently has interests in two thermal coal exploration projects in East Kalimantan province with an estimated resource potential of 12-14 million metric tonnes, pending confirmation by geological studies.

The first is an 80% interest in PT Chaya Meratus Primecoal, an Indonesian company holding exclusive exploration and development rights for up to 6,000 hectares in the Tanjung Area Basin of south east Kalimantan.

The second is an exploration and production license covering 1,300 hectares in the East Kalimantan province through an agreement with the concession holder, PT Integra Prime Coal.

The company also has an extensive pipeline of additional projects under review for potential licensing or acquisition. East Kalimantan has the distinction of being at the epicenter of thermal coal mining and exports from Indonesia.

For context, most of the country's coal mines, including the largest, are located in East and South Kalimantan and two of the world's largest coal mining companies, BUMI and Adaro Resources operate in the region. Our concessions show extensive coal formations at the surface, and preliminary field work by our field geologists give us a high level of confidence in the resource estimates previously mentioned.

Currently our projects do not have JORC-compliant resource estimates, which is one of the standards used in the mining industry to assure shareholders and other stakeholders that the resources a company says they have are in fact present.

"We are actively engaged in securing JORC estimates for both of our concessions, and will do so for all additional concessions we acquire. This will significantly increase our company's attractiveness to institutional investors," Borneo said.

(sourced:Theindonesiatoday.com)

Jatenergy to mine first coal under new Indonesian JV

Saturday, 19 Nov 2011

Jatenergy has announced that it will mine its first coal this week, after entering a JV with a currently producing coal mine, Jongkang II in East Kalimantan in Indonesia. The company expects its first sales of high quality thermal coal to Asian customers to occur this year.

JV partner CV Karya Putru Bersama has already sold about 40,000 tonnes of coal from Jongkang II. This milestone realizes Jatenergy's goal of diversifying its energy business.

Jongkang II is Jatenergy's third JV agreement in East Kalimantan, but the first to enter production, with partnerships for the Jongkang and Atan Bara projects.

Jongkang and Atan Bara are both considered to be short to production and Jatenergy expects to follow up in the near future with development of the two projects, once production licenses are granted.

Under the latest agreement, Jatenergy is required to provide working capital in order to earn 30% of the net margin of the coal, as well as to undertake full marketing and sales rights to the coal.

Cash flows from these projects will be used to advance the evaluation and eventual development of the company's showcase Katingan coal project in Central Kalimantan.

In addition to its Indonesian operations, Jatenergy recently executed binding agreements to purchase eight coal exploration permits and permit applications in Queensland's Bowen and Galilee Basins.

BHPB to begin work on IndoMet coal project

Friday, 04 Nov 2011

BHP Billiton Ltd said that it plans to begin work on the USD 1.34 billion IndoMet coal project in Indonesia within weeks, a move that would open up a new mining province to help meet booming Asian demand for steelmaking raw materials.

BHP said that joint venture companies controlled by BHP and Indonesia's PT Adaro Energy will begin building the Haju mine in jungle around 220 kilometers northwest of Balikpapan port by the end of the year.

Haju is the first stage of the IndoMet project on the island of Borneo, which could be producing 5 million metric tons of coking coal annually by 2017. IndoMet is BHP's fifth-biggest coking coal resource.

A BHP spokeswoman said that "PT Lahai will construct a road and a mine (Haju) and related infrastructure, commencing, subject to approvals, in the fourth quarter of 2011.”

(sourced Dow Jones Newswires)

Indonesian Miner Plans $167m IPO to Fuel Sumatra Coal Boom

Fri,October 07, 2011
By Francezka Nangoy

Coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to help finance its expansion plans.

The company plans to sell 783 million shares, or about 25 percent of its equity, according to Atlas’s underwriter, Indo Premier Securities. The shares will be offered at Rp 1,500 to Rp 1,900 per share to generate Rp 1.17 trillion to Rp 1.49 trillion.

Indo Premier managing director Moleonoto said Atlas would allow an over-allotment of up to 117.5 million shares if there is an oversubscription.

Atlas corporate secretary Aulia Setiadi an said on Friday that most of the proceeds will be used to build supporting infrastructure in its Sumatra coal mining hubs in Muba and Oku. Atlas also operates mining centers at Berau and Kubar in Kalimantan and in Papua.

The company is focusing on its Muba hub because it is the largest facility, with capacity set to reach 5.1 million tons a year by 2013. Atlas will invest $106 million on infrastructure there, Aulia said.

The company is currently waiting for an exploration permit for Papua, but output at the three other hubs is expected to reach 9.3 million tons in 2013.

Atlas’s current total capacity is about 2.5 million tons. In the first four months of this year the company’s total production was 400,000 tons. It produced 1.3 million tons in 2010.

Aulia said that as well as receiving funds from the IPO, the expansion will draw on the company’s internal cash flow and bank loans.

Abdi Andre, Atlas’s president director, said in a statement that about $25 million of the IPO funds will go to compensation for the restructuring of the company’s supply contract with Hong Kong-based Noble Group Limited, with the aim of starting a new marketing and sales contract.

Another 27.5 percent of the proceeds will be set aside for acquisitions in new fields should an “opportunity arise,” Abdi said. Atlas has no current plans to acquire another company, he said.

Indo Premier’s Moleonoto, said that despite the volatile market, he was confident the share sales would be successful.

“We are optimistic because Atlas has an interesting investment scheme and growth prospects,” Moleonoto said.

Book building and an international roadshow will be held from Oct. 10-18. Atlas expects to carry out the IPO from Oct. 31 to Nov. 2 and list on the Indonesia Stock Exchange on Nov. 8.

In the first half of 2011, Atlas booked Rp 402 billion in revenue, up 47 percent on the same period last year. Profit zoomed to Rp 46 billion in the year’s first half, up from Rp 2.5 billion in the same period last year.

The listing underlies the boom in the nation’s coal mines, which have been in high demand recently.

(sourced TheJakartaglobe)

ISMT all set to acquire coal mine in Indonesia

Tuesday, 04 Oct 2011

ET reported that ISMT which has announced plans to enter the infrastructure sector via its integrated port and power project in Tamil Nadu is looking at acquiring a coal mine in Indonesia as a backward linkage for its fuel requirements.

Mr Rajiv Goel CFPO of ISMT said "We will need 6 to 7 lakh tonnes of coal per annum for both our power plants, the 40 MW captive plants at Chandrapur, in Maharashtra, and the first phase of our Tamil Nadu power plant of 170 MW. This requires a small mine of 25 million tonnes which will then protect both plants."

He added that the first step of environmental clearance for the TN power plant is still awaited while the Indonesian coal mines will not happen just yet. By his estimate, it will be the end of FY 13 before they need to bring in investors for the integrated project.

He further stated "The Tamil Nadu power plant will be a group captive power plant, supplying power to industrial customers and not feed into the state grid. Under the government's rules, such customers have to take a stake totaling 26%, while we are comfortable holding a 50% stake in the special purpose vehicle, Tridem Port and Port Co Pvt Ltd."

Tridem is a proposed INR 10,000 crore integrated port and 2000 MW thermal power plant with the captive port ensuring coal supplies are not disrupted. While the power plant will come first, Mr Goel did not rule out bringing in strategic investors into the port project and scaling it up to handle containers.

Energy costs for the steel maker are a significant outgo which it is trying to curb through setting up captive power plants.

(Sourced from Economic Times)

New Indonesian coal law adds to power company woes in India

Wednesday, 28 Sep 2011

Power projects that had planned to get coal from Indonesia are yet to find a solution to the new law there that increased their costs and upset their viability calculations, even as the regulation that did all this took effect on Monday.

The new regulation says coal sold from the country is to be indexed to the international price and revised annually.

Among the high profile projects facing uncertainty is TATA Power ultra mega power project in Mundra, which is to commission its first unit of 800 MW this month. Reliance Power UMPP at Krishnapatnam where site work is yet to begin is also awaiting clarity on what to do. Both companies have made representations to the power ministry. Adani Power 4,000 Mw project at Mundra would also see cost escalation on the fuel side.

Estimates say projects of this size will lose INR 2,000 crore annually due to fuel price fluctuations. The ministry of power has yet to come up with a decision on a request made by the Association of Power Producers to allow them to pass on increased fuel prices to buyers. Senior electricity authorities say a decision on this matter now rests with individual power procurers mostly state-owned power utilities.

Mr Pramod Deo chairman of the Central Electricity Regulatory Commission said “If they feel they need the power contracted to them, they can make the decision.”

Experts note there is now provision in the law which allows a company to pass on escalation of fuel costs after a contract has been signed. The imported coal-based projects of both TATA Power and Reliance Power were awarded after competitive bidding. The winning companies were to shoulder the responsibility to arrange coal from an international location and made bids based on these. Both had acquired coal assets in Indonesia.

Mr Anil Razdan an energy consultant said concessions should be offered to these projects to facilitate timely implementation.

(sourced from Business Standard)

GMR Infra to buy 30 pct stake in Indonesian coal asset

Fri Aug 12, 2011 10:16am IST

MUMBAI (Reuters) - GMR Infrastructure said on Friday its unit GMR Energy Ltd has entered into a pact to acquire a 30 percent stake in Indonesia's PT Golden Energy Mines Tbk or GEMS, for $450-$550 million in cash, joining the line of Indian firms buying coal assets across the globe to seek fuel security.

Shares of GMR Infrastructure rose as much as 3.5 percent during early trades.

GEMS is a Sinar Mas Group company, GMR Infrastructure said in a statement to the stock exchange.

As part of the deal, which is expected to close in calendar year 2011, GMR Energy Ltd has entered into an off-take agreement with Golden Energy, a unit of Dian Swastatika Sentosa, to buy coal over the next 25 years starting Jan 1, 2012.

The annual off take will steadily increase to 10 million tonnes per annum over the coming years, it said.

GMR, with interests in airports, energy and highways, will fund the buy via a combination of debt and internal accruals, it said.

The buy will "significantly enhance the fuel security of the power plants under construction and development by GMR Energy Ltd. as also provide a coal portfolio for trading activity," the company said.

Indian firms have rushed to find coal mine assets in Indonesia, South Africa and Australia to fill the growing gulf between domestic coal output and demand.

In May, three sources told Reuters that Coal India, the world's largest coal miner, was in advanced talks to buy up to 40 percent stake in Golden Energy Mines for up to $1 billion.

GVK Power and Infrastructure, which has been scouting for coal mines for the past two years to fuel its power plants, was also in advanced talks to buy a coal mine owned by Australia's Hancock Prospecting.

At 10:00 a.m. (0430 GMT) shares of GMR Infrastructure were trading at 30.60 rupees, up 2.51 percent in a firm Mumbai market.

(sourced Reuters)

Killara Resourced to acquire six Coal concessions of Tason Holdings

Wednesday, 10 August 11

Killara Resources Limited, an Australian listed company has formed PT Tavesco Killara Energy (TKE), a joint company with PT Tavesco International which owned by Tanri Abeng, a former Indonesia's state enterprises minister. TKE is being set up to sourcing, exploring, and potentially developing coal projects in Indonesia, according to the statement released by Killara Resources Limited.

Tavesco as part of PT Tason Holdings (Tason) that owned by Tanri Abeng, has presented a number of coal concessions throughout East and South Kalimantan to Killara for review and assessment for potential inclusion within PT TKE.

Report further said, desktop studies of the short listed concessions have been completed and confirmatory site inspections on the initial six concessions are underway, with results of the site visits expected by the end of August. This work will determine which concessions the parties select for inclusion in PT TKE, which would then be subject to detailed due diligence prior to potential acquisition.

TKE is targeting to produce two millions metric ton of coal in the end of this year.“We are planning to sell our coal to Indonesia State Electricity of Company,” Ridwan Zachrie, chief executive officer Tason Holdings and also director of TKE said to COALspot.com via SMS.

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ADARO TO ALLOT US$100 MIO FOR COKING COAL - INSIDER STORIES

Tuesday, 19 April 11

One of Indonesia's largest coal miner PT Adaro Energy Tbk (ADRO) plans to spend US$100 million in coking coal project dubbed IndoMet Coal, a joint venture company with BHP Billiton.

Adaro, via a subsidiary namely PT Alam Tri Abadi, owns 25% shareholding in IndoMet Coal and BHP controls the remaining stake in the coking coal miner with concessions in South and East Kalimantan, as quoted by Insider Stories.

Insider Stories furhter said, Adaro owns 25% shareholdings in seven units of BHP such as PT Maruwai Coal, PT Juloi Coal, PT Kalteng Coal, PT Sumber Barito Coal, PT Lahai Coal, PT Ratah Coal, and PT Pari Coal.

“At end of first quarter last year, we acquired 25% stake from BHP worth US$334.73 million. We will spend US$100 million in 2011,” said Adaro Corporate Secretary Devindra Ratzarwin as quoted by Investor Daily today.

He said the investment in IndoMet Coal is beyond the total capital expenditure set by Adaro.

Adaro plans to spend US$608 million-US$628 million capex this year. For routine expenses, the company will spend US$175 million and US$250 million to purchase heavy equipments, said Insider Stories.

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Monnet Ispat to buy another coal mine in Indonesia

Wed, Mar23,2011

Monnet Ispat touched an intraday high of Rs 532.50 and an intraday low of Rs 529.95. At 09:29 hrs the share was quoting at Rs 531.50, up Rs 6.15, or 1.17% on the NSE.

The company is close to buying another coal mine in Indonesia having reserves of fewer than 100 million tones, reports Business Standard.

It was trading with volumes of 2,573 shares. In the previous trading session, the share closed up 0.31% or Rs 1.60 at Rs 525.35. (source:moneycontrol)

Update Coaltrans India, New Indonesian coal regions seen as a ‘good fit’ for India

Tue, Mar08, 2011 By Creamer Media Reporter

PERTH (mining weekly. com) − Emerging coal supply areas in Indonesia would be instrumental to meeting rapidly growing coal demand from India, research firm Wood Mackenzie said on Tuesday.

Coal research analyst Rohan Kendall said at the Coaltrans India conference that Indonesia would account for 40% of growth in seaborne thermal coal supply over the next ten years, with the emerging coal areas of the South Sumatra basin and Wahau coalfield making an important contribution to this growth.

“There is $8-billion of infrastructure projects in the pipeline in these emerging areas that will support export growth,” Kendall said.

Emerging coal regions were a “good fit” for developing economies, such as India. These areas were experiencing upstream investment as Indian power generators such as Reliance and Adani looked to secure coal supplies for new power stations.

He noted that there were currently several ultramega power plants being built in India with a capacity of over 4 000 MW each, and still more were planned. The projects currently in development were similar in capacity to those in China and were expected to be operational between the second half of 2011 and 2014.

“Coal production costs are low in emerging basins in Indonesia, which is why they are attractive to Indian power generators. The costs of investing upstream to secure coal requirements are much lower than Indian power generators would otherwise pay if they were to purchase all of their coal on the seaborne market.

“Also, for power stations that are being built on the coast, it is more realistic to seek seaborne supplies which do not depend on India’s rail network for transport,” he added.

The research firm noted that in order for emerging thermal coal supply areas to fulfill their potential, infrastructure challenges needed to be overcome.

“There is currently insufficient infrastructure in these areas to support large scale coal exports. There are numerous projects proposed which combined would add 140-million tons a year of capacity. We believe that some of these are unlikely to progress given regulatory challenges.”

Edited by: Mariaan Webb

US$ 8 billion worth of infrastructure projects in pipeline in Indonesia -Wood Mackenzie

Tuesday, March08, 2011

India’s Increasing Demand for Thermal Coal cannot be satisfied without emerging coal areas in Indonesia - Wood Mackenzie

At Coaltrans India 2011 in New Delhi today, Wood Mackenzie says that emerging coal supply areas in Indonesia will be instrumental to meeting rapidly growing coal demand from India.

Drawing on information contained within Wood Mackenzie’s Coal Supply Service and Global Cost and Margin Tool, Presenter and Coal Research Analyst, Rohan Kendall said, “Indonesia will account for 40 percent of growth in seaborne thermal coal supply over the next ten years, with the emerging coal areas of the South Sumatra basin and Wahau coal field making an important contribution to this growth. There is US$8 billion of infrastructure projects in the pipeline in these emerging areas that will support export growth.”

Emerging coal regions are a good fit for developing economies, such as India, because the basins contain abundant reserves. These areas are experiencing upstream investment as Indian power generators such as Reliance and Adani look to secure coal supplies for new power stations. There are currently several ultra-mega power plants being built in India with a capacity of over 4,000 Megawatts each; and still more are planned. The projects currently in development are similar in capacity to those in China and are expected to be operational between the second half of 2011 and 2014.

Kendall expands, “Coal production costs are low in emerging basins in Indonesia, which is why they are attractive to Indian power generators. The costs of investing upstream to secure coal requirements are much lower than Indian power generators would otherwise pay if they were to purchase all of their coal on the seaborne market. Also, for power stations that are being built on the coast, it is more realistic to seek seaborne supplies which do not depend on India’s rail network for transport.”

Wood Mackenzie says in order for emerging thermal coal supply areas to fulfil their potential, infrastructure challenges need to be overcome. Kendall says, “There is currently insufficient infrastructure in these areas to support large scale coal exports. There are numerous projects proposed which combined would add 140 million tons per annum (Mtpa) of capacity. We believe that some of these are unlikely to progress given regulatory challenges.”

In summary, coal supplies from emerging basins in Indonesia are expected to increase strongly over the next ten years. The large reserves in these areas will be instrumental to meeting India’s future thermal coal requirements. Coal from emerging areas is cost competitive with established basins but the main question remaining is when and how the infrastructure issues can be overcome to bring the coal to market.

About Wood Mackenzie
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger.

Tags : Indonesian coal traders, suppliers, exporters, miners

Vallar, Bumi complete $1.48 billion transaction

Mon,Mar 07, 2011 10:06PM |The Jakarta Post|Business

JAKARTA: British investment giant Vallar Plc. has closed a transaction with Indonesia’s top coal producer, Bumi Resources, in a reverse takeover deal that would allow a London Stock Exchange listing for soon-to-be established Bumi Plc., both companies said in separate statements Friday.

Bakrie and Brothers (BNBR), the majority shareholder of Bumi, received 90.1 million new Vallar shares Friday issued at a value of £10 (US$16.26) each in exchange for a 25 percent stake in the coal miner.

Vallar’s 25 percent stake in Bumi was valued at Rp 2,500 per share, totaling Rp 13 trillion (US$1.48 billion). The shares were previously held by Bakrie and Brothers.

Bakrie chief executive officer Bobby Gafur Umar said the transaction was a “win-win” step for both parties.

“By being listed on the London Stock Exchange we expect BNBR’s value, profile and position at the international level to increase,” he said in a written statement.

Bobby added that the acquisition would allow his company greater access to capital and financial markets.

Tags : shareholders, stake in coal mine, acquisition,

Indonesia's Adaro Energy says its unit secures $400 mln loan facility

Tue Feb 22, 2011 7:16am GMT

JAKARTA Feb 22 (Reuters)

PT Adaro Energy , Indonesia's biggest coal miner by market value, said on Tuesday that its contractor unit, PT Saptaindra Sejati, had secured a $400 million facilities agreement from 13 banks, including PT Bank Mandiri .

(Reporting by Fathiya Dahrul, sourced:Thomson Reuters)