Astra Group to double coal reserve to 500 million tonnes

PT United Tractors Tbk, a unit of PT Astra International Tbk, plans to double its coal reserve to 500 million tonnes within the next three years by acquiring more mines, a company executive said.

Prijono Sugiarto, Astra International's President Director as quoted by Bisnis Indonesia said that United Tractors currently has coal reserve of 250 million tonnes. ?We have set target to have coal reserve of 500 million tonnes in the next 3 years. We are preparing United Tractors and Astra Agro Lestari as the main drivers for future growth of Astra, but it does not mean that we are abandoning our automotive business" he said, adding that although automotive remains attractive but the firm sees huge opportunity in coal and palm oil.

United Tractors has main business in heavy-equipment but it started entering coal business through its mining contractor unit PT Pamapersada Nusantara.

President director of PT United Tractors Tbk Djoko Pranoto said the company will use funds from rights issue worth Rp6,07 trillion for the acquisition of coal mines.

Pranoto said the company is aware that coal reserves in many big concessions are depleting but it is optimistic to achieve the target of doubling UT's coal reserve.

United Tractors booked net profit of Rp2.54 trillion in the first half of this year, a 35 percent increase from Rpl,89 trillion in the same period 2010.

The company posted revenue of Rp 25.62 trillion in the first half this year, surging 42% from Rp18,08 trillion in the same period 2010. Heavy-equipment business accounts for 51 percent of the company's revenue.

Pamapersada Nusantara accounts for 38,3% while coal business accounts for the remaining 10,6%.

Bagus Hananto, Analist at PT Onix Capital said United Tractors have acquired a number of coal mines since early this year which will help the company's plan to boost its reserve within the next 3 years. UT' share closed 1.51 percent down to Rp26.100 per share on Wednesday. (*)