Atlas to divest high CV coal subsidiary

IDX-listed coal mining firm PT Atlas Resources Tbk is in the process of selling its subsidiary PT Diva Kencana Borneo, which operates high calorific value (CV) coal mine in East Kalimantan, Kontan reported on Wednesday.

The paper quoted Atlas President Director Andre Abdi as saying that the company will focus on lower rank coal with CV of 4,000-4,200 kcal/kg. He said that two foreign companies and one domestic company are currently conducting due diligence on Diva Kencana, which has coal with CV of 6,300 kcal/kg. He declined to disclose the name of the firms. He expected good price for the high CV coal asset.

According to company?s website, Diva Kencana, with 4,864-hectare concession, forms part of Atlas?s nearly 15,000-ha Kukar coal mine hub in East Kalimantan?s Kutai Barat Regency. Other parts of the Kukar hub are operated by subsidiaries PT Karya Borneo Agung (5,000-ha) and PT Bara Karya Agung (5,000-ha).

Elsewhere, Andre said that Atlas will also return its Papua hub coal concession to the government as it is considered to be no longer economically feasible.

Atlas plans to boost coal production this year to 2 million tons, 2.5 times larger than output last year, of which 1.2 million tons will come from its South Sumatra coal hub. The company has obtained contract from state-owned electricity firm PT PLN to supply 60 million tons of coal over a 20-year period. (*)