Coal news and updates

ABM Investama’s mining contractor unit Cipta Kridatama has inked a $206 million deal to remove overburden and haul coal in East Kalimantan for miner Multi Harapan Utama.

 

“The long-anticipated contract signing is a breath of fresh air, as it will last for as long as the mining concession does,” Cipta Kridatama president director Yovie Priadi said in a statement on Monday.

 

The company said under that the five-year contract Cipta will provide mining services including overburden removal, coal distribution, coal hauling, rental of heavy equipment, and infrastructure maintenance for two mining pits owned by Multi Harapan located in Tanjung Laung and Loa Kulu in Kutai Kertanegara, East Kalimantan.

 

Based on the contract, Cipta is expected to remove 107 million bank cubic meters (bcm) of soil and rock — known as overburden — during the five-year period, so that around 9 million metric tons of coal laying underneath can be mined, the statement said. The coal will be exported to several countries in Asia.

 

In March this year, Cipta also signed a five-year coal mining contract worth $225 million with Realita Jaya Mandiri, a company with a mining concession in South Sumatra.

 

Last year, Cipta contributed 42 percent of ABM Investama’s total $887 million revenue. It removed a total of 130 million bcm of overburden for 10 clients. That quantity of overburden was 10 percent up from 2011, and this year’s figure is targeted to increase by a further 7.7 percent.

 

ABM’s other businesses include engineering, power and logistics. The company is controlled by Tiara Marga Trakindo Group, which is owned by the Hamami family, a prominent entry in Globe Asia’s Indonesia’s rich list.

 

Coal mining in Kalimantan, along with palm oil plantations, has been cited as the main drivers of destruction of Borneo’s remaining forest areas, and contributes an estimated 460 million tons of carbon dioxide per year to the atmosphere.

 

Shares of ABM fell 0.9 percent to Rp 2,700 on Monday, in contrast with the 2.9 percent gain in the main stock gauge. Shares of ABM have lost 8.5 percent on concerns of lower investment by coal miners as coal export prices remain weak.

 

Source: www.thejakartaglobe.com