JAKARTA (TheInsiderStories) - Indonesian coal miner, PT ABM Investama Tbk (IDX: ABMM) plans to spend around $200 million in this year, partly for the preparation of a coal mine acquisition. The company also has plans to release the global bond with a maximum value of US$400 million.
The director, Adrian Erlangga, said end of last week, that the proceeds from the global bond issuance will be used to refinance global bonds worth of $350 million which will mature in August 2022. The bonds have an interest rate of 9.5 percent and will mature in 2026.
He adds, ABM Investama has allocated up to $250 million for the acquisition plans. The company is eyeing productive mine around Sumatra, East Kalimantan and South Kalimantan. This year, he continued, set the coal production to reach 13.5 million tones (MT) of coal. As of the first quarter of 2021, 4.4 MT of coal had been realized.
Currently, the miner has two mines in Aceh and South Kalimantan with a total coal reserve of 245 MT of coal. In 2020, this coal mine under PT Reswara Minergi Hartama’ umbrella produced 12.56 MT of coal with a contribution of 73 percent from Aceh and 27 percent from Kalimantan.
ABM Investama also has a mining contractor under the banner of Cipta Kridatama. In 2020, the unit hasreceived three new contracts from PT Kuansing Inti Makmur, PT Berkat Murah Rejeki and PT Energi Batubara Lestari.
As reported, the benchmark of coal price has continued to climbed in the last three months and closed at the level of $59.65 per ton. The contract price for Newcastle thermal coal futures is already above $80 a ton. According tot he executive director of the Indonesian Coal Mining Association, Hendra Sinadia, the upward trend in the black gold commodity price will continue next year.
He rated, the increase in coal prices was caused by several factors. First, the improving economic recovery in a number of countries, especially economic growth in China as the main market. Second, the coal market is also boosted by natural factors such as colder winters in the northern hemisphere, rain and waves in Indonesia, and cyclones in Australia.
Third, the existence of tensions in China’ trade relations with Australia also contributed to heating up the coal price and the commodity market. He predicts that the current price trend will last, at least until the middle of next year.
In addition, said Sinadia, the coal price and market movements in 2021 will also depend on how the COVID-19 pandemic is handled. With the pandemic still not over, he estimates that the miners will still wait and see or be careful in carrying out corporate actions, especially an expansion.
While, from the production side, the volume in the Work Plan and Budget that has been approved by the energy and mineral resources ministry will remain the benchmark. Demand is expected to be higher, so that production levels can be spurred more than this year, he concluded.
Apart from the mining contractor business, ABM Investama has a business in logistics, engineering services and manufacturing and sales of fuel oil. Erlangga said, the company aimed to increases the reserves around 70 – 100 MT of coal. He hopes that the acquisition targets can be executed in this year.
Written by Editorial Staff, Email: [email protected]
