Borneo Energi secures US$108 million contract
JAKARTA: PT Borneo Lumbung Energi & Metals Tbk has secured a contract to supply 120,000 ton coking coal for China Steel over the next three years, valuing US$108 million or IDR972 billion.As per May, of US$200 million or IDR1.8 trillion capital expenditure
JAKARTA: PT Borneo Lumbung Energi & Metals Tbk has secured a contract to supply 120,000 ton coking coal for China Steel over the next three years, valuing US$108 million or IDR972 billion.As per May, of US$200 million or IDR1.8 trillion capital expenditure allocation, the company has spent US$140 million-US$150 million to construct mining infrastructure and heavy equipment procurement.Borneo Energi happened to secure China Steels contract recently as it still eyes and negotiates three large scale coking coal contracts, said Borneo Energi Marketing Director Ken Allan.Borneo expects 75% of its sale this year to be realized through contract after the company derived a significant profit from its sales particularly by referring to spot price that soared last year.Yesterday, we have just signed a contract with China Steel to supply 120,000 ton of coking coal per year. The contract costs US$300 per ton, slightly different with spot price market at US$315 per ton, he said last week.The contract price can be renegotiated every quarter. In the first quarter of 2011, China and Taiwan contributed almost 90% or IDR1.05 trillion of the companys total sale on that period reaching IDR1.2 trillion.Contract negotiationSeveral ongoing negotiations include a contract to supply coal to Japans Nisshin Steel, reaching 400,000 ton per year as well as a contract to supply coal to PT Sherong Carbon, amounting to 120,000 ton.In the domestic market, Borneo is eyeing 800,000 ton coal supply for blast furnace to PT Krakatau Steel Tbk as well as 3 million ton per year coal supply for PT Krakatau Posco. There are also several negotiations, including with Indoferro, Linfen in Bekasi with 500,000 ton per year coal supply and Wanina, Ken added.Borneos stock price was closed 1.29% lower to IDR1,530 per share on Friday last week, leaving the market capitalization at IDR27.07 trillion.Borneo Energi did not pay any dividend as the 2010s net income, reaching IDR348.85 billion is saved as retained earnings.Krakatau Steel plans to propose a loan to China-based Export Credit Agency consortium this week.The company is still reviewing IDR4.18 billion possible loan to Export Credit Agency (ECA), said Krakatau Steel Corporate Vice President Wawan Hermawan. (t02/msw)
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