BUMI to spend Rp 21 trillion for expansion

Indonesia?s largest coal producer PT Bumi Resources Tbk plans to spend up to Rp 21 trillion (about US$2.26 billion) to finance expansion activities in the next few years including the company?s diversification into gold, copper and zinc mining and oil and gas sectors, Kompas reported on Saturday.

BUMI?s Senior Vice President Dileep Srivastava said in Jakarta on Friday that about $1.1 billion of the funds would be allocated to finance expansion projects of the company?s two coal mining subsidiaries PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.

The expansion plan would enable it to increase the coal production at the mines to 111 million tons in 2012 from about 58 million tons at present, he said, adding outside the coal mining, BUMI would also develop copper and gold mines in Gorontalo and Central Sulawesi with investment of about $500 million or about Rp 4.7 trillion.

The copper and gold mines which are expected to begin production in 2013 would be able to contribute EBITDA (earning before interest, taxes, depreciation and amortization) of about $900 million or about Rp 8.5 trillion a year, he added.

In addition, BUMI will also provide about $211 million or about Rp 2 trillion for subsidiary Herald Resource to develop zinc mine in Dairi, North Sumatra.

Dileep said that the expansion funds would come from the company?s own funds and bank loans. As of August, this year, the company?s total debts reached $3.17 billion. (*)