Orpheus secures additional infrastructure capacity in S. Kalimantan, offtake partner in place

By Ruli Setiawan

ASX-listed Orpheus Energy Limited said on Thursday it has executed a binding agreement with PT Suryacitra Mahkota Mandiri, the operator of Abidin 1 port in South Kalimantan, to secure exclusive barge loading capacity of 40,000 tons per month (tpm) on an ongoing basis.

Abidin 1 Port is located on the Satui River, approximately 30km north-east of SKJM Port, is less than 10km from the coastline, and has a current loading capacity of over 120,000tpm. With the recent SKJM Port agreement, Orpheus now boasts a significant loading capacity of approximately 3 million tons per annum (Mtpa).

Under contract, Orpheus has sourced the 4200 Kcal/kg (GAR) specification coal from nearby local miners and has entered into a five-year offtake agreement with an Indonesian trading group to purchase the coal. The price is set against the Indonesian benchmark, with a quarterly pricing review process.

Orpheus anticipates loading the first barge at Abidin 1 Port within the next fortnight and expects to load an additional 7,500t barge in late October.

Orpheus Executive Chairman, Wayne Mitchell commented: ?We are delighted to be announcing our second infrastructure deal in the last month, representing a further step in Orpheus?s vertical integration strategy to grow our infrastructure and trading divisions.?

The agreement with Abidin 1 Port coupled with the existing offtake partner in place allows Orpheus to further progress our low-risk, low-capital program, adding significant monthly and yearly coal tonnage revenues, Mitchell said.

?Together with our recent SKJM Port agreement, Orpheus will soon be loading and selling in excess of 240,000 tons per month out of South Kalimantan for at least the next five years. This significant transformation allows the company to grow a diversified revenue stream whilst fast-tracking its goal of becoming cash flow positive,? he added.

Editing by Reiner Simanjuntak