UK plantation firm eyeing Indonesian coal mine acquisition

UK plantation firm and crude palm oil producer R.E.A. Holdings plc is considering possible investment in Indonesian coal mining.

The company said it has now established a small office in Jakarta to pursue this possibility. The office, which is staffed and operated quite separately from the group's plantation operations, has secured for the group a short term arrangement to source coal from Kalimantan and supply it to a power station in Sumatra. The company did not give more detail.

With the experience gained from this initial activity, and with assistance from the group's long standing local connections in East Kalimantan, the group has been able to consider a number of opportunities for the acquisition of land areas in East Kalimantan with potential for open cast mining of coal, it said. One such opportunity is currently being actively pursued. This would involve the acquisition by the group, for a consideration of about US$3.5 million (to be satisfied in cash), of mining rights in respect of a concession area with existing permits for coal mining and geological reports confirming proven coal reserves suitable for open cast mining.

A final decision as to whether to proceed with this acquisition should be made in the near future, it added.(alex)