Asia Resources mulls divesting RI mining business
Thursday, July 28 2016 - 07:43 AM WIB
Hong Kong-listed Asia Resources Holdings Limited said Wednesday it is considering disposing the Indonesia mining business to potential risk-taking investors who are interested in the mine so that the management can focus their effort on the other business units.
The firm said in a statement that the management had decided to stem the export of the iron sand trading business of PT Dampar Golden International (an indirect 60% non-wholly owned subsidiary of the group) in Lumajang, East Java, Indonesia during the year ended March 31, 2016 as the purity level of the iron sand did not meet the minimum requirement under the Indonesia mining regulation.
"Coupled with the continuous low iron ore prices curtailed the profit margin of the iron mining business, the management had also postponed the setting up of the sponge iron factory, and ceased all activities at the mine site in order to reduce overheads and machinery rental charges," the statement said.
All processing plants had been dismantled and removed to warehouse storage. Meanwhile, the company said it continues to maintain a minimum skeleton crew to maintain the safe custody of the plant and machineries and basic functions of the administration.
As a result of the above mentioned issues, a further impairment of the remaining carrying value of intangible asset (the exclusive right owned by PT Dampar) totalling HK$26,557,000 was recognized in accordance with the valuation report of an Independent Valuer.
The Iron Ore sand (iron ore fines) mine is located in Lumajang, East Java, Indonesia covering a site area of at least 1,195 hectares. The Mining Business Licence (or Ijin Usaha Pertambangan -IUP) issued by the Head of Regency of Lumajang, East Java.
Editing by Reiner Simanjuntak