Acquisition Plan of Samindo Resources (MYOH) Complete in 1-2 Years
Issuer of coal mining contractor PT Samindo Resources Tbk. (MYOH) targets the acquisition of a coal mine to be completed within the next 1-2 years.
Samindo Resources President Director Kim Jung Gyun said the company plans to acquire coal mines since 2016. The corporate action is targeted to be completed within the next 1-2 years.
In 2018, the company is intensifying the mine acquisition process. It aims to achieve the mission of Samindo Resources as a leading company in resources and energy.
"In the future we will integrate various coal business lines. Therefore, we are targeting to complete the acquisition process within one or two year, "he said, Friday (4/5/2018).
The mining specifications to be acquired are those that allow the company to supply to the Steam Power Plant (PLTU) at the mouth of the mine. It aims to cut the transportation cost.
In the acquisition later, Samindo will only take a share of 20% -30%, or not become a major shareholder. With the acquisition, management hopes to get a mining contract from a new partner company.
"Later we can work on the mining operations of the acquired company. But our participation is only 20% -30%, or the second or third position of the largest shareholders, not the majority, "he explained.
Related to the specification of the mine to be acquired, continued Kim, Samindo adjust to market demand, especially from China and India. Both countries are still using coal for power plant, so the need of coal with 4,200 kcal / kg of coal is still quite high.
Independent Director of MYOH Ahmad Saleh said, the acquisition process takes time. In addition, the company's had several mine as a candidate for the acquisition, so Samindo should consider carefully.
According to him, MYOH opens the opportunity to acquire coal mines that produce 4,000 Kcal / kg calories because it can supply for mine mouth power plant. The production rate is around 5 million tons per year with reserve volume of 20 million tons.
"So it will possible to integrate of mining contracts, coal sales, including the development of its steam power plant," he said.
Investor Relations MYOH Ahmad Zaki added, in 2016 the company allocates US $ 25 million acquisition fund. However, at that time the price of coal is still in the range of US $ 50 per ton.
In a situation where coal prices are heating up as this year, the value set by the mines to be acquired also increases. Therefore, the possibility of acquisition value will surpass the initial plan of US $ 25 million.
"Basically, our funds are ready to make the acquisition. In addition, we will be assisted by Samtan [Samtan Co. Ltd.] as the parent company "he said.
In 2018, the company allocated US $ 13.8 million of capital expenditure from internal cash for heavy equipment purchase. All equipment will come in late May or June 2018, so full-capacity operations will take place starting July 2018.
As of March 2018, MYOH overburden volume increased 12.5% ??yoy to 12.6 million bank cubic meters (BCM) from 11.2 million BCM. However, coal production declined 16% yoy to 2.1 million tons from 2.5 million tons previously. The decline in coal production operations is due to the lack of heavy equipment specifications from sub-contractors.
This year, MYOH targets the overburden volume from the Kideco mine totaling 48.5 million BCM, while the Bayan project is estimated at 5.8 million BCM. The total amount of 54.5 million BCM, edged up 5.44% yoy
Earlier in 2017, the overburden volume reached 51.5 million BCM and coal production of 10 million tons.