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ABM Investama Secures US$58.8 Million Coal Mining Services Contract


Jakarta, May 11, 2015 - PT ABM Investama Tbk (ticker code: ABMM), through its subsidiary PT Cipta Kridatama (CK), has once again secured a new contract for coal mining services worth approximately US$58.8 million from PT Mitrabara Adiperdana Tbk (ticker code: MBAP) that is part of the Baramulti Group. The contract was signed by CK President Director Irfan Setiaputra and MBAP President Director Khoirudin on May 6, 2015 in Jakarta.

In accordance with the contract, CK will provide mining services such as land cover removal (overburden removal), coal hauling from pit to ROM, and heavy equipment rental at MBAP’s mine location in Malinau, North Kalimantan. During the contract’s three-year period, CK is targeting as many as 30 million bcm in overburden and ground cover removal. A minimum of 2 million tons per year has been set for the 5,400-calorie coal GAR production of 1,930 hectares land area.

CK President Director Irfan Setiaputra said that the contract with MBAP is a proof of the high trust among coal business operators towards CK’s performance in the industry. CK is optimistic that the new contracts secured will allow the company's business to grow in a sustainable manner over the long term.

"We are grateful that CK has secured new contracts amid the many challenges surrounding the coal industry. This achievement is part of CK’s attempts to ensure that the company's performance remains positive," said Irfan in Jakarta, Sunday (5/10).

Previously, CK had secured non-coal mining service contract worth more than US$187 million from PT Adidaya Tangguh. The contract, which is valid until 2023, is CK’s first contract in iron ore mineral mining. Meanwhile, to optimize assets and expertise, as well as market opportunities, CK had also ventured into construction services in 2014.

MBAP President Director Khoirudin expected the contract agreements with CK to provide a better level of certainty for the company in producing and delivering coal to buyers. With CK’s long reputation in the mining service industries, Khorudin is optimistic the company will be able to achieve the defined production target.

"The coal market is still open to both domestic and global needs. Taking into account the MBAP mine sites in North Kalimantan and their advantages in producing low ash and very low sulfur, the company will focus on coal supply for the premium market in Japan, Taiwan, India and others, while also exploring the possibility of supplying the premium domestic market that requires environmentally friendly types of coal, such as those produced by MBAP," said Khoirudin.

ABM Investama Director Yovie Priadi added that CK’s success in securing new contracts in the mining services sector will contribute positively to ABM Investama’s performance. Moreover, CK’s strategy in entering non-coal business services will certainly expand opportunities for the company to optimize its assets and competence in the business.

"CK strategy’s to enter the non-coal business is a very positive initiative amid pressure surrounding the coal industry. With so many business sectors growing and relevant to CK’s expertise, this move will allow the company's fundamentals to remain solid," said Yovie.