Bumi to acquire S. Sumatra coal concession

Publicly listed company PT Bumi Resources confirmed Tuesday it had signed a memorandum of understanding to acquire PT Pendopo Energi Batubara, a company that holds a 34,430-hectare coal mining concession in Muara Enim regency, South Sumatra, for about US$3 million as an effort to enter coal liquefaction business.

Bumi president director Ari Hudaya said Tuesday the Sales and Purchase Agreement for the acquisition will be signed soon.

Ari said Bumi was scheduled to commence the construction of the $3 billion coal liquefaction project mid this year. The project, which is located adjacent to the concession, would last for between 3 and 4 years, he added.

Ari also said the plant would need between 17 and 20 million tons of coal annually to produce approximately 80,000 barrels of synthetic oil per day.

Pendopo Energi is a third generation Coal Contract of Work signed in 1999. The company has embarked on the feasibility study on a 17,840-hectare of the concession.

According to Petromindo.Com data, the company is majority owned by timber company PT Barito Pacific Timber.

Bumi recently said it had agreed to sell 95 percent of PT Kaltim Prima Coal, 100 percent of PT Arutmin Indonesia and Indo Coal Resources Ltd for $3.2 billion. (godang)