Adaro Energy update: Business Development
Thursday, August 1 2013 - 03:10 AM WIB
BUSINESS DEVELOPMENT
Acquired Assets Continue to Make Progress; Expect Balangan to Produce 2014
We have spent three years making selective capital project investments to help expand and improve efficiency and acquisitions to diversify and increase our reserves. As these investments become operational, such as the new Balangan deposit, we expect our returns to increase.
We continue to concentrate on mining readiness for our green field coal concessions in South Sumatra (MIP, BEE) and East Kalimantan (BEP). Mining readiness includes obtaining required permits, acquiring land, securing social and community support, and completing engineering and geological studies. We are not investing any significant capex into the development of any of our acquired concessions.
Our joint venture with BHP Billiton, the IndoMet Coal Project, continued the development of its seven Coal Contracts of Work (CCoW) in Kalimantan. Construction of minesite accommodations, port-site accommodations, administrative offices and an industrial area were underway.
Balangan drilling continued in order to complete JORC reserve studies, which included using Laser Imaging Detection and Ranging (LIDAR) that provides rapid accurate data on topography. Land acquisitions, building the hauling road that will connect to our existing haul road at Paringin, and bridge construction continued. We expect to complete the JORC reserve study late 2013 and produce in early 2014.
Power Generation
In-line with our strategic move further towards downstream integration from ?Pit to Port to Power,? Adaro has made significant progress towards the realization of this strategy. We continue to believe in the long term resiliency of our business model and the growth potential in coal markets and emerging market Asia. However, our move downstream into power will smooth out the volatility of our coal business.
PT Adaro Power and Korea East West Power are working towards developing a 2X100 MW Independent Power Producer (IPP) coal fired power plant project located in Tanjung, South Kalimantan. Steady progress has been achieved in developing this project and during the quarter we agreed on a final form of the Power Purchase Agreement.
In our 2X1000 MW coal fired power-plant project in Central Java, in which we share 34% ownership with J-Power (34%) and Itochu Corporation (32%), land acquisition has made significant progress during this year. We continue to put in best efforts to complete it within our time frame. (end of excerpt)