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BHP Biliton sell Indonesian assets to Adaro for $120m

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JAKARTA (TheInsiderStories) – Sydney’s  BHP Billiton has entered into an agreement to sell its 75 per cent interest in Indonesian assets, IndoMet Coal to its equity partner PT Alam Tri Abadi, unit of coal miner PT Adaro Energy Tbk (IDX: ). The deal is worth US$120 million, according to a person familiar with the matter.

IndoMet Coal comprises seven Coal Contracts of Work which are located in Central and Eastern Kalimantan, Indonesia.  The Haju mine, which is located within the Lahai Coal Contract of Work, has a production capacity of one million tonnes of coal per annum and has been in production since 2015.

James Palmer, IndoMet Coal Asset President said: “After a detailed review of IndoMet Coal, we concluded that although the Project could support a larger scale development, BHP Billiton has a range of other growth options in the portfolio that are more attractive for future investment.”

Completion of the sale is conditional upon the fulfilment of customary regulatory approvals.  During the approval period BHP Billiton and Adaro will work together to facilitate a smooth transfer of ownership.

IndoMet which began production last year 25 percent own by Adaro unit holding. Last year, BHP in a spin off to focus only on large-scale operations and is also prioritizing investments in copper and conventional petroleum.

BHP joined with Swiss miner Glencore currently said to jointly buy a stake in a Colombian coal mine. BHP and Glencore both own 33 per cent of the Cerrejon coal mine in Colombia, and have been approached by the owner of the remaining 33 per cent, Anglo American, about its desire to sell its stake.

Glencore chief executive Ivan Glasenberg said he would be willing to grow his stake if an appropriate price could be agreed. His preferred model would be for BHP and Glencore to both increase their stakes to 50 per cent.

“If it was a 50/50 (joint venture) we would have to look at that with BHP if they wanted to buy it together with us,” He said.

BHP may also buy coking coal assets in Queensland, with some quality assets now on the market, including Anglo’s Grosvenor project.

Glencore is more bullish about the future of thermal coal than most major miners, and  Glasenberg said the outlook for the downtrodden sector was improving. The comments come despite Chinese coal imports falling dramatically in 2015, but he was optimistic about India’s role in the coal market.

 

 

 

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Source: The Insiderstories
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