Cipta Kridatama Secures US$396 Million Coal Mining Service Contract
Jakarta, June 3, 2015 - PT Cipta Kridatama (CK), a subsidiary of ABM Investama Tbk (IDX: ABMM) has once again secured a new contract for coal mining services worth US$396 million. The working contract between CK and PT Adimitra Baratama Nusantara (ABN), a subsidiary of PT Toba Bara Sejahtera Tbk (IDX: TOBA), is valid for five years until 2020.
The working contract between the two companies was signed by Cipta Kridatama President Director Irfan Setiaputra and Adimitra Baratama Nusantara President Director Hamid Awaludin in Jakarta on Friday, May 29, 2015.
In the agreement, CK will provide mining services such as overburden removal and heavy equipment rental at the ABN mining site in Sanga-Sanga, East Kalimantan. Throughout the contract period, CK is expected to produce up to 263 million bcm in overburden and ground cover removal.
This new CK contract with ABN will reinforce the company’s business portfolio in the mining service sector. CK had previously secured a new US$58.8 million coal mining service contract from PT Mitrabara Adiperdana Tbk (IDX: MBAP), which is part of the Baramulti Group. In addition to the coal business, CK also attained a US$187 million iron ore mining service contract from PT Adidaya Tangguh, which is under the Salim Group.
Cipta Kridatama President Director Irfan Setiaputra said that the new mining contracts secured by CK proves the high trust among coal business operators towards CK’s performance in the industry. CK is therefore optimistic that the new contracts attained will allow the company’s business to grow in a sustainable manner over the long term.
“We believe that the national coal business continues to pose very positive potentials. The long-term contract with ABN is highly crucial for CK to ensure growth and solidify the company’s business fundamentals in the near future,” said Irfan Setiaputra.
Adimitra Baratama Nusantara President Director Hamid Awaludin said that the company believes that CK, a major player in the national coal mining service business, will be able to meet the defined production target. ABN is therefore assured that the partnership with CK will raise the company’s value through maximum coal production.
ABM Investama Strategic Director Yovie Priadi explained that the long-term contract from ABN proves CK’s existence as a mining contractor that is supported by strong fundamentals. To raise its competitiveness in the industry, CK will continue innovating to strengthen and expand its business portfolio, thereby allowing the company to maintain the growth of its business amid the dynamics found in the industry.
"We are very grateful of the strong trust among mining business players towards CK. This shows that CK's standard of service and performance is capable of providing maximum added value to our business partners," said Yovie.
Coal produced from the Sanga-Sanga region will be used by ABN to supply domestic coal demand, with a portion to serve the export market. National coal demand is expected to rise in the next few years in line with the government’s program to develop a 35,000 MW electricity generator, where the majority will use coal.