Adaro Energy update: Business Development
Tuesday, November 1 2011 - 02:08 AM WIB
BUSINESS DEVELOPMENT
Two Greenfield Coal Project Acquisitions in South Sumatra
On August 19th 2011, AE acquired a 75% stake in PT Mustika Indah Permai (MIP) from Elite Rich Investment Limited for US$222.5 million. MIP holds an IUP permit which was granted in April 2010 for a period of twenty years and covers an area of approximately 2,000 hectares. Marston, an international mining consultant, carried out engineering studies of the coal potential, on which the valuation was based. The additional drilling and coal analysis required to completely meet JORC standards is being done; after which, a JORC compliant statement of Resources and Reserves will be issued.
On October 14th 2011, AE bought an additional 46% stake for US$46 million from Lucky Star Corporation, Oriental Holdings Ltd. and BrightPath Corporation to become the majority shareholder in PT Bukit Enim Energi (BEE) with a 61.04% stake in total. BEE is a coal mining company developing a greenfield coal project in Muara Enim, South Sumatra. BEE holds an IUP permit which was granted in March 2011 for a period of twenty years which covers an area of 11,130 hectares. Marston helped perform the geological studies of the coal potential, on which the valuation was based. Additional drilling and coal analysis are required before a JORC compliant statement of Resources and Reserves can be issued.
Acquisition of an Integrated Coal Mining Services Provider in South Sumatra
On October 10th 2011, AE acquired a 35% interest in PT Servo Meda Sejahtera (SMS) for Rp200 billion. AE carried out this transaction to support and develop its coal logistics operations in South Sumatra. SMS owns a dedicated haul road which provides coal hauling services and a dedicated coal port which provides barge loading services in South Sumatra.
JPower-Adaro-Itochu Consortium Signed PPA for a New 2,000 MW Central Java
Power Plant Project
On October 6th 2011, PT Bhimasena Power Indonesia (BPI), a company established by JPower-Adaro-Itochu consortium, signed a Power Purchase Agreement (PPA) with PT PLN (Persero) for the 2,000 MW Central Java Power Plant (CJPP) project with total project cost of approximately US$4 billion. The PPA includes the construction of the power plant and a 25-year supply of electricity to PLN. The Government of the Republic of Indonesia (represented by the Ministry of Finance), Indonesia Infrastructure Guarantee Fund (IIGF) and BPI also signed a Guarantee Agreement (GA) to guarantee PLN?s payment obligation for the CJPP project under PPA. This is the first actualized public-private partnership (PPP) in Indonesia under a guarantee provided by the IIGF and part of the Master Plan for Acceleration and Expansion of Indonesian Economic Development (MP3EI).
This power plant is the first in Indonesia to use advanced, environmentally friendly, ultrasupercritical (USC) technology and will serve as a model of high-efficiency power generation. The power plant will utilize Indonesian sub-bituminous coal as fuel, with AI as the primary coal supplier. The construction is expected to commence in 2012 with commercial operations by 2016-17.
IndoMet Coal (IMC) project with BHP Billiton
Further studies to identify development options across the seven Coal Contracts of Work (CCoWs) of the IndoMet Coal project continued during 3Q11. The IndoMet Coal project, which is 25% owned by Adaro Energy?s subsidiary, ATA, will inform the market of the results of the study phase at the appropriate time. (end of excerpt)