Adaro Energy update: Business Development
Wednesday, August 1 2012 - 02:01 AM WIB
PT Mustika Indah Permai (MIP)
During 2Q12, we continued to build orders to sell Ultima, which is the brand name of MIP?s coal, to end users in Indonesia, China, India, Taiwan, Thailand, The Philippines and Vietnam. We will utilize our own mining and hauling contractor, SIS, to mine and transport the coal. As of the end of June 2012, SIS has placed some heavy equipment at the site. We plan to spend approximately US$50 million for the capital expenditure, excluding heavy equipment, and split it evenly over 2012 and 2013 using Adaro Energy?s cash holdings.
On March 22nd 2012, we announced the Joint Ore Reserves Committee (JORC) Compliant Coal Resources and Reserves for MIP with total estimated resources of 286.4 million tonnes and reserves of 272.6 million tonnes. We are aiming to produce coal at MIP by the end of 2012 and to ramp up to three to four million tonnes per year by 2014 and up to ten million tonnes per year in five years from the time operations commence. PT MIP is 75% owned by Adaro Energy.
PT Servo Meda Sejahtera (SMS)
During 2Q12, we continued to make progress in land clearing, cut & fill and graveling process along the haul road. The construction of the haul road was 87% complete while the bridges were 79% complete at the end of June 2012. The work at Muara Lematang port was 99% complete as the work on the barge loading conveyor, genset and electrical work continued to make good progress. We had trial operations for one barge as of the end of June 2012 and we plan to start commercial operations in September 2012. Our investment in MIP and SMS is part of our strategy to replicate the proven success of Adaro Indonesia?s business model in South
Kalimantan to create long-term, sustainable value from Indonesian coal. PT SMS is 35% owned by Adaro Energy. (end of excerpt)