EAST KALIMANTAN: Indomining, a subsidiary of Indonesian coal miner Toba Bara Sejahtera, signed an agreement on Monday worth $115 million with mining contractor RPP Contractors Indonesia to develop a coal mine in East Kalimantan, Jakarta Globe reported news.
“We will cooperate with RPP Contractors Indonesia [RCI] for the next five years,” said Arthur Simatupan, the president director of Indomining.
The work will include land clearing, overburden removal, ripping, loading and transporting waste management, road maintenance, and treating water.
“We hope this synergy will yield the best performance for both [companies],” said Justarina Naiborhu, the president director of Toba Bara.
“We are proud to become the contractor for Indomining’s coal mine, and we are fully committed to completing the work being targeted,” said Budiono Tanbun, the president director of RCI.
RCI replaced previous contractor Saptaindra Sejati, whose commitment had already expired.
Indomining’s coal concession, which covers 683 hectares of land, is located in Sanga-Sanga, Kutai Kartanegara, East Kalimantan.
The total coal reserves at the mine, which the company has operated since 2007, are estimated to be 37 million tons.
Toba Bara Sejahtera owns a majority stake in three coal mining subsidiaries: Indomining (99.99 percent); Adimitra Baratama Nusantara (51 percent) and Trisensa Mineral Utama (99.92 percent).
Adimitra possesses a mining concession in Sanga-Sanga that covers 2,990 hectares and has an estimated 156 million tons of coal reserves.
It has operated the mine since September 2008.
Trisensa owns coal mining permits that cover 3,414 hectares of land in three different locations in Kutai Kartanegara: Loa Janan, Muara Jawa and Sanga-Sanga. The company controls 43 million tons of coal reserves. In total, the Toba Bara group manages an estimated 236 million tons of coal deposits.
Founded by former Trade Minister Luhut B. Pandjaitan in 2010, Toba Bara raised Rp 400.3 billion ($43 million) from selling 210.68 million shares, or 10.5 percent of its total capital, to the public in mid-2012.
The firm said it will use more than half of the proceeds from the IPO to help finance its exploration of its mining area.
The company is targeting to produce 12.1 million tons of coal by 2014, up from the 7.6 million tons estimated for 2012.
Meanwhile, RCI, which was founded in 2003 in Samarinda, East Kalimantan, is owned by Rental Perdana Putratama.
RCI has worked with other major coal miners in the past, including Tanito Harum, Buki Baiduri Enterprise and Jembayan Muara Bara, which is part of the Sakari Resources group.
In December 2012, the firm completed its contract with Jembayan.
RPP, controlled by businessman Sohat Chairil, holds a 99 percent stake in RCI.