Petrosea, Adimitra in mining contract extension for $930m

Indonesia-listed mining contractor firm PT Petrosea Tbk, a unit of Indika Energy Tbk, and East Kalimantan coal miner PT Adimitra Baratama Nusantara (ABN) have signed a term sheet to amend their current contract including extension of the contract in order to increase volume of coal production, for US$930 million.

Petrosea has signed Amended and Restated Agreement which includes overburden removal with ABN on 25 August 2011, Petrosea said in a press statement on Tuesday.

Petrosea said that under the new deal, the expiration of the contract will be extended to December 2018 from the current contract expiry date of August 18, 2014.

Earlier, ABN has asked Petrosea to increase production volume from its Kutai Kartanagara coal mine. Adimitra expects for the coal output to increase to 4 million tonnes from 3 million tonnes this year and further ramp up to 5 million tonnes in 2012.

In August 2009, Petrosea Tbk secured US$200 million mining contract with Adimitra. Under the contract, which is set to commence in August this year, Petrosea will load and haul 14 million tonnes of coal and 126 million bcm of overburden over the 5-year contract period.

Besides Petrosea, Adimitra also hired local contractor PT. Bangun Karya Pratama Lestari (BKPL) to mine its coal. This year, Adimitra is expecting to produce 4.1 million tonnes of coal and to double it to 7-8 million tonnes in 2013.(denny)