ABM unit secures $428m mining, construction services contract

By Peni Pedriawan

IDX-listed integrated energy company PT ABM Investama Tbk said that its subsidiary PT Cipta Kridatama (CK) has signed a five-year contract worth US$ 428 million with PT Kaltim Jaya Bara (KJB) for overburden removal, heavy equipment rental and construction of infrastructure at mining site.

The contract was signed on Wednesday by CK?s President Direct Yovie Priadi and KJB?s President Director Djohansyah R in Jakarta.

?The contract with KJB is a significant achievement for CK, not only for the contract value, but also taking into account the potential synergy and long - term development prospects. CK has been involved in the process prior to the commencement of the mining activities (the green field project), such as in the construction of the 30 kilometer hauling road leading to the mining location,? said Yovie Priadi, President Director of CK, in a statement on Wednesday.

This project is in line with CK?s business plan in 2013 to expand its business, beyond its current capacity as a mining services provider, and venture further into construction services. ?We hope that our business expansion by developing the hauling road construction infrastructure at KJB would give additional value to our client,? Yovie explained.

KJB has medium calorie 5,600 GAR coal (sub - bituminuous) with more than 10 years potential life of mine. KJB has signed a long-term contract with an off-taker to ensure the continuity of production and sales of KJB products.

?With Cipta Kridatama?s experience, supported by a professional team and our focus on the business, we are confident that we will be able to proceed with this project without fail, ? Yovie added . The total overburden removal targeted by the end of the project in 2018 is at 151.5 million BCM.

Editing by Reiner Simanjuntak