ABMM bags $150m for mining development

The Jakarta Post | Business | Fri, March 15 2013, 12:17 PM

Listed energy company PT ABM Investama (ABMM), through its subsidiary PT Reswara Minergi Hartama, secured loan facilities amounting to US$150 million, which will be used to develop its coal mining sites.

The loans come from Qatar National Bank (QNB), Jakarta listed Bank QNB Kesawan and the Indonesian Eximbank.

“Most of the $150 million fund will be used for infrastructure development on mining sites in Nagan Raya regency and Aceh Barat regency in Aceh and a small amount for working capital,” Reswara president director Harry Asmar said.

ABMM holds 100 percent stake in Reswara, which owns a 70 percent stake in PT Media Djaya Bersama, the owners of the two concessions in Aceh. The infrastructure development, which includes port development, road hauling, offices, workshops and other facilities, is estimated to cost $125 million in total.

The infrastructure development is expected to be completed in November this year and will help ABMM’s Aceh sites accommodate higher coal delivery.

Its Aceh sites had previously secured delivery for produced coal, including a contract to supply to cement company PT Lafarge Cement Indonesia.

Besides Media Djaya Bersama, Reswara also has concession in South Kalimantan operated by its subsidiary PT Tunas Inti Abadi. Total Reswara’s resources have reached 561 million tons and 221 million tons in reserves.

Coal sales reached 4 million tons last year and is projected to increase to 6 million tons this year.

ABMM corporate secretary Ade Satari said that the company saw that Reswara had suffered from declining selling prices last year.

“In the beginning of the year, average selling price stood above $50 per ton, then plunged below $40.  However, we are optimistic that this year will be better as prices have increased and sales volume has also been higher,” Ade said.

ABMM, a member of Tiara Marga Trakindo Group — the distributor of Caterpillar heavy equipment — and controlled by the Hamami family — also runs mining contracting business through its subsidiary PT Cipta Kridatama. Coal mining and contracting business contributed to about 60 percent of ABMM’s total revenue, according to its financial report as of the end of September last year. The company has not revealed its full year financial report.

ABMM also runs a power solution business that is supported by engineering services and integrated logistic services.

ABMM Investama director of corporate strategy Yovie Priadi has said that the company’s total expenditure for its entire business line this year would be between $275 million and $300 million.

Shares in ABMM closed at Rp 3,150 (32 US cents) apiece on Thursday, increasing by 1.61 percent from a day earlier.

http://www.thejakartapost.com/news/2013/03/15/abmm-bags-150m-mining-development.html

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