Bumi Resources: From tourism to mining giant
Tuesday, July 22 2003 - 06:30 AM WIB
PT Bumi Resources started with hotel and tourism business when it was established in 1973. Today, following the acquisition of coal mining firm PT Kaltim Prima Coal from Anglo-American energy giant BP PLC and Anglo-Australian mining giant Rio Tinto, it has become the country?s largest coal producer.
Listed on the Surabaya and Jakarta Stock Exchanges, Bumi Resources is controlled by PT Bakrie Capital Indonesia, the financial arm of Indonesian conglomerate Bakrie Group.
BP and Rio Tinto, the former equal partners in KPC, announced on Monday that they had sold their entire stake in KPC to Bumi Resources for US$500 million.
The acquisition has added to the company?s coal mining assets in Indonesia, which are projected to produce a total of 34 million tons this year, or about 30 percent of the country?s projected coal output of 115 millions. Now, the company wholly owns KPC and controls 80 percent of PT Arutmin Indonesia.
KPC, which operates a coal mine in Sangatta, East Kutai, East Kalimantan, has planned to increase its output 18 million tons this year from about 16 million tons last year, while Arutmin, based in South Kalimantan, has planned to ramp up its output to 16 million tons this year from about 11 million tons last year.
Bumi Resources will be followed by South Kalimantan-based PT Adaro Indonesia, controlled by Australian firm New Hope, as the country?s second largest coal producer. The firm has planned to increase its output to 22 million tons this year, from 20.81 million last year.
East Kalimantan-based Kideco Jaya Agung, controlled by South Korean investors, is the country?s third largest producer with a projected output of 13.5 million tons this year, while Thai-controlled Banpu Group, which has several mines in East Kalimantan, South Kalimantan and Central Sumatra, is the fourth largest producer with a projected output of 11.5 million tons this year.
State-owned Bukit Asam, which operates in South Sumatra, is the fifth largest producer with last year?s output of 9.5 million tons. The company has no plans to raise output this year.
The acquisition of KPC by Bumi Resources has not only made the latter become the country's largest coal producer, but has also strengthened its status as the producer of high quality coal. KPC?s coal is considered as one of the best in the world given its high calorific contents. KPC exports 95 percent of its coal output.
Bumi Resources also produces high quality coal at Arutmin?s mines in Senakin and Satui, South Kalimantan. Bumi Resources gained control of Arutmin in October 2001 after acquiring the 80 percent stake owned by Australian mining giant firm BHP Australia.
According to the company?s website, aside from mining business, Bumi Resources is also active in hotel and oil businesses. The company, which carried the name of PT Bumi Modern before it was taken over by Bakrie Capital in 1997, wholly owns Bumi Tashkent International Hotel (Le Meridien Tashkent Hotel) in Tashkent, Uzbekistan. It also has a 50 percent working interest in the East Al Maber Block (Block R-2) oil concession and a 100 working interest in the Al Armah (Block 13) oil concession, both located in the Hadramaut region of the Republic of Yemen.