Geo Energy acquires PT Tanah Bumbu Resources
Published by Jonathan Rowland,
Geo Energy is to acquire a 98.73% stake in PT Tanah Bumbu Resources (TBR) for US$90 million, adding 44.4 million t to Geo Energy’s total mineable coal reserves. TBR is expected to start production in early 2017 and expand Geo Energy’s coal production to no less than 10 million t in 2017.
“The proposed acquisition of TBR would allow our group to double its coal JORC reserves to more than 100 million t to be one of the largest coal producer in Indonesia and a major one in the region,” said Geo Energy’s CEO, Tung Kum Hon.
TBR’s coal mine is located adjacent to Geo Energy’s existing subsidiary, Sungai Danau Jaya (SDJ). SDJ has a JORC estimated coal reserves of 42.4 million t with a calorific value of 4000 – 4200 kcal/kg. It began production in December 2015.
The acquisition of TBR is the third transaction announced this year by Geo Energy. In February, the group agreed to buy a 79.9% stake in PT Tarisma Jaya Abadi, while in March it agreed to buy a 99.5% stake in PR Cahaya Lembusuana.
According to Tung Kum Hon, now is an opportune time to be investing in the Indonesian coal sector.
“The Indonesian Coal Index is showing promising signs of sustained uptrend and coal asset prices around the region still remain at attractive valuations,” he said. “Based on current price trends, we are expecting the ICI for 4200 GAR to hit US$30 per tonne by end July or August 2016 and US$35 per tonne in 2017.”
The acquisition of TBR is expected to close by the end of the year and Geo Energy is now in discussion with its mining contractor on redesigning its SDJ mining plant into include a combine the SDJ and TBR assets.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/20072016/geo-energy-acquires-pt-tanah-bumbu-resources-2016-2046/
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