Cakra cancels acquisition of three iron ore mines
Tuesday, December 31 2013 - 02:30 AM WIB
IDX-listed iron ore mining firm PT Cakra Mineral Tbk has decided to cancel an earlier plan to acquire three iron ore mines in West Sumatra, Aceh, and Lampung owned by Brussel Capital as they are considered to be not feasible.
?The one in Aceh, for example, the concession is located quite far, and we have to pay a high royalty to the local communities. Meanwhile, starting next year, we would no longer be allowed to export iron ores following the implementation of the Mining Law. So, we decided to cancel the (acquisition) plan,? explained Corporate Secretary, Dexter Putra to Petromindo.com, on the sidelines of a public expose in Jakarta on Monday.
The company had been seeking to acquire three concessions since 2012. Currently, the company, which initially operated in the oil palm plantation sector, has one iron ore concession in Sungai Kunyit, West Sumatra, operated by subsidiary PT Persada Indo Tambang (PIT). The concession is estimated to produce 100,000 tons of iron ores in 2013.
Dexter said that production in 2014 would be about the same with the estimated volume for 2013. ?The problem for us is the (government?s) mineral ores export ban starting January,? he said.
He added that Cakra is in discussion with a Chinese smelter company to build domestic smelter facility. ?We have visited their plant in China. But this is not an easy thing as we have to provide funds up to US$150 million. These are the things that we?re discussing, although the plan is for the construction of the smelter to start in 2014,? Dexter said, but declined to disclose the name of the Chinese company.
Editing by Reiner Simanjuntak