JAKARTA (TheInsiderStories) - Publicly listed company, PT ABM Investama Tbk (IDX: ABMM), announced to releases global bond up to US$400 million for debt refinancing and other needs. The issuer has bonds $350 million which will mature in 2022 with a fixed interest rate of 7.125 percent.
Based on the announcement released on Wednesday (03/31), the miner offered the notes with a maximum interest rate of 9.5 percent per annum. The mining contractor will seek approval from the shareholders on May 7 on the planned.
In this year, ABM Investama plans to spend $60 million to support the planned to produce 12 million tones (MT) of coal and have a capacity production range of 11.5 MT of coal per year. The director, Adrian Erlangga, optimistic that the coal business has good prospects in this year and the following years inseparable from the COVID-19 vaccinations.
At the same time, Asian economies are expected to grow rapidly, giving rise to the need for additional energy. As a result, coal demand in Asia also has the potential to increase. Capitalized on this optimism, the coal miner also opened up options to look for new mines. Currently, the company is conducting due diligence on several mines in the Kalimantan region.
He explained, the investment needed for the mine acquisition around $250 million. Currently, ABM Investama has three mining business permits, two of which are in the Aceh region and one in South Kalimantan with total coal reserves around 260 MT of coal. In 2020, the coal producer has cut the production around 19 percent of the initial targets 15 MT of coal.
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.
Written by Editorial Staff, Email: theinisderstories@gmail.com
