Borneo seeks to triple coking coal production through IPO
Wednesday, October 20 2010 - 04:27 AM WIB
Company?s prospectus released on Wednesday revealed that the company will float 20 percent its shares, but did not disclose the funds it sought to raise. Director Geroad Jusuf said in October 2010 interview that the company was seeking to raise US$400 million from the IPO.
Borneo said 50 percent of the funds raised will be used to finance the mine?s expansion and the balance would be used to pay out debts. Apart from AKT, Borneo also has a mining contractor subsidiary PT Borneo Mining Services which mines for AKT.
Asmin Koalindo Tuhup Reserves and Resources
| Description (million ton) | Kohong | Telakon | Total |
| Reserves | |||
| Proved | 36.5 | - | 36.5 |
| Probable | 32.7 | - | 32.7 |
| Total of Reserves | 69.2 | - | 69.2 |
| Resources | |||
| Measured | 57.8 | - | 57.8 |
| Indicated | 74.3 | - | 74.3 |
| Inferred | 148.6 | 98.1 | 246.7 |
| Total of Resources | 280.7 | 98.1 | 378.8 |
| Source: SMGC Report | |||
Borneo acquired 99 percent shares of AKT from Transasia Mineral Ltd in 2007. AKT is a coal contract of work (CCoW) holder with current concession area of 21,630 hectares of land located in the regency of Murung Raya. AKT signed contract with the government of Indonesia in 1999 and the contract will be valid until 30 years from the granting of exploitation license.
AKT is located in the heart of Kalimantan island South of BHP Billiton?s Maruwai coal concessions and East of Itochu?s semi soft coking coal mine PT Marunda Graha Mineral.
According to the prospectus, AKT has proved and probable reserves of 69.2 million tonnes and resources of 378.8 million tonnes from two blocks, namely Kohong and Telakon. AKT?s current coal production comes from the Kohong block.
AKT has commenced commercial production since September 2009 and has produced 752,000 tonnes of hard coking coal branded ?Tuhup Coal? from January to June 2010. Borneo expects AKT to produce 1.8 million tonnes and sell 1.6 million tonnes of coal in 2010.
Asmin Koalindo Tuhup Coal Specification
| Description | General Quality | Base |
| Total Moisture | 9.0% | ISO - ar |
| Inherent Moisture | 1.8% | adb |
| Volatile Matter | 26.5% | adb |
| Ash Content | 7.0% + 0.5% | adb |
| Fixed Carbon | 64% | adb |
| Sulphur | 0.8% + 0.05% | adb |
| Phosporus | 0.015% max | In coal |
| Gray King | G 11 - G 13 | ? |
| CSN | 9 | ? |
| HGI | 105 | ? |
| CV | 8,300 | ISO - adb |
| CSR | 60 | AS |
| CRI | 26.4 | AS |
| Vitrinite | 97% | (Min) |
| Reflectance | 1.23 - 1.27 | Ro Max |
| G Caking Index | 91 | ? |
| CV | > 7,600 | kcal |
| Source: ACIRL Report on Pilot Scale Carbonisation & Laboratory Testing of Tuhup Marketing Sample September 7, 2010 | ||
Asmin Koalindo Tuhup Coal Sales
| Description | 30 June 2010 | For the year ended December | ||
| 2010 | 2009 | 2008 | 2007 | |
| Production volume (tonnes) | 752,107 | 882,039 | 22,868 | - |
| Sales volume (tonnes) | 617,603 | 131,359 | - | - |
| Coal sales (million Rp) | 1,074,602 | 200,529 | - | - |
| Average Selling Price per ton (USD) | 191.5 | 168.1 | - | - |
| Cash cost of production (USD/ton) | 57.5 | 60.6 | 107.4 | - |
| Average strip ratio | 12.9 | 15.1 | 23.1 | - |
Currently, the mine?s capacity is being ramped to 3.6 MTPA from 2.4 MTPA with completion seen at the end of 2010. Further production capacity ramp-up to 5MTPA is seen to be completed at the end of 2011.
AKT transport its coal from crushing plant to Muara Tuhup river port in Barito River through 35-km haul road, employing trucks with capacity between 20-35 tonnes. At Muara Tuhup, coal will be conveyed to barge using AKT?s 2,400 tph conveyor barge loader which has been in operations since April 2010.
Coal will then be barged by 562 kilometers in two stages to Taboneo anchorage in South Kalimantan, where coal will be transferred to ocean going vessels. According to the prospectus, it will take four days for a coal barge from Muara Tuhup to reach Taboneo.
AKT has leased 26 sets of 220-230 ft tug and barges with capacity of 3,500-4,000 tonnes and another 13 sets of 300 ft with capacity of 8,000 tonnes.
AKT combines two sizes of barges in its barging operations to and employs intermediate stockpile in Teluk Timbau. Under the combination system, the smaller tugs and barges will transport coal from Muara Tuhup to Teluk Timbau (290 kms) and then transferred to bigger barge from Teluk Timbau to Taboneo (272 kms).
According to the company, the Muara Tuhup-Teluk Timbau line is not stable due to shallow water which could sometime fall below 4 meters, minimum depth required for smaller size barges to pass. To mitigate the barge transportation problem, AKT has leased two stockpiles with capacity of up to 500,000 tonnes. AKT is planning to build its own intermediate stockpile in the future to reduce dependency from third party, it disclosed.
Borneo has also signed deal with third party to provide modified panamax vessel which can stockpile up to 60,000 tonnes of AKT?s coal with loading/unloading capacity of 40,000 tonnes per day to be placed at Taboneo. The panamax is currently undergoing modification, including addition of auxiliaries such as crane and mechanized hole covers, which will be completed by the end of 2010.
Borneo has appointed international trader Glencore International AG as agent to sell its coal under three-year deal that started on July 23, 2009. The company is also in marketing deal with Japan?s Sumitomo Corporation to sell its coal to Japan market and also with AsiaCo Solutions Pty Ltd.
According to Borneo, it has sold AKT?s coal production to coke plants in China, India, South Korea and Japan and a small quantity of coal to domestic users. AKT?s coal?s has been successful in attracting the interest of major customers and AKT?s coal is price on par with Australian coking coal, the company claimed.
Borneo is controlled by executive-turn-businessman Samin Tan. (alex)