Resources Prima extends coal offtake agreement with key customer
Monday, July 27 2015 - 02:49 AM WIB
SGX-listed Resources Prima Group Limited, which operates coal mines in Indonesia, said Monday that it has entered into an extended offtake agreement for coal with PT Anugerah Bara Kemilau (ABK), the group?s major customer.
The company said in a statement that the extended offtake agreement is an extension of the existing offtake agreement, and will cover shipments from June 1, 2015 to May 31, 2016. ?We are also pleased to announce that, in June 2015, the group had recorded total shipments to ABK amounting to approximately 159,000 metric tons (MT), representing an increase of 52.9 percent from approximately 104,000 MT shipped to ABK in June 2014,? the company said.
Pursuant to the extended offtake agreement, the company and ABK have agreed that the quantity of coal available for sale shall be mutually agreed on a monthly basis, Resources Prima said. This is compared to the previous offtake agreement where a specified quantity of coal is required for delivery over the life of the agreement. ?Save for this amendment, the salient terms and conditions of the extended offtake agreement are generally similar to the previous offtake agreement,? the statement said.
As the total quantity of coal to be delivered pursuant to the extended offtake agreement is not known, Resources Prima said it is unable to ascertain the impact of the extended offtake agreement on its financial performance for the current financial year ending March 31, 2016.
With the extended offtake agreement, Resources Prima said it will be able to pursue its plans to manage the marketing and sale of its coal through RPG Trading Pte. Ltd., a wholly-owned subsidiary of the company.
Executive Chairman and Chief Executive Officer, Agus Sugiono says: ?We are extremely pleased to have forged a strong business relationship with ABK since the first off-take agreement commenced on 1 June 2013. Despite weak macro conditions surrounding the coal industry at the moment, we are encouraged with the shipments made in June 2015 which reflect the stable demand for our coal due to our competitive edge such as strategic location of our coal mine as well as the higher grade coal which we offer with an average calorific value of approximately 5,600 kcal/kg (gar).?
?I look forward to achieving the next major milestone for the Group, as we push ahead to clear the final step to secure approval for the second ?borrow-use? permit for the remaining 1,624.46 ha (IPPKH2) of the mining concession area. IPPKH2 could lead to an increase in the group?s coal reserves and resources and could enable the group to expand its coal.
Editing by Reiner Simanjuntak