UPDATE: BHP Billiton, Adaro In Indonesian Coal Joint Venture
March 31 2010 - 6:23AM
Dow Jones News
BHP Billiton Ltd. (BHP.AU) said Wednesday it has entered into a
joint venture with a subsidiary of PT Adaro Energy (ADRO.JK) for a
coal project in Indonesia.
Adaro will take a 25% stake in the project, which covers seven
contract areas in East and Central Kalimantan provinces, where
undeveloped metallurgical and thermal coal resources are estimated
at 774 million metric tons. BHP will hold the rest, it said.
"These agreements with Adaro provide a strong local partner to
ensure the successful development of our world-class metallurgical
coal interests in Indonesia," Hubie van Dalsen, BHP's metallurgical
coal president, said in a statement.
The agreement still needs to be approved by the Indonesian
government.
Adaro Energy's Director of Corporate Affairs and Corporate
Secretary Andre Mamuaya said the coal project in Maruwai was still
in the exploratory phase.
"We are also doing a feasibility study to determine when we can
start production," Mamuaya said.
Mamuaya didn't mention the value of investment of Adaro's unit
in the project.
In December, Macquarie Securities said Adaro's $1.3 billion
fundraising in late 2009, consisting of a global bond and standby
loan, would allow "significant" acquisitions such as BHP's Maruwai
project.
Adaro, the country's second-ranked thermal coal miner by output,
plans to mine around 45 million tons of low-sulfur thermal coal in
2010 versus 41 million tons forecast this year, and to export
70%-75% of it in 2009 and 2010, the company's chief executive said
in December.
Earlier Wednesday, Adaro Energy posted a near five-fold jump in
2009 net profit mostly due to a sharp increase in revenue.
Net profit for the January-December period rose to IDR4.37
trillion from IDR887.20 billion in the previous year.
-By Cynthia Koons; Dow Jones Newswires; 61-2-8272-4691;
cynthia.koons@dowjones.com
-Edhi Pranasidhi in Jakarta contributed to this article.
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