Medco acquires coal assets

PT Medco Energi Mining International (MEMI), a subsidiary of PT Medco Energi Internasional (MEDC) Tbk, has on June 26 signed a conditional sales and purchase and subrogation agreement (CSPA) with PT Medco Mining to acquire PT Duta Tambang Sumber Alam (DTSA) and PT Duta Tambang Rekayasa (DTR).

PT Medco Mining, parent company of DTSA and DTR, is controlled by the same shareholders of Encore International Ltd, which is the largest shareholder (50.71%) of MEDC. Total transaction value of US$886,013 has made the acquisition is considered non material.

No information provided on coal reserves acquired. But according to MEDC prospectus, the combined concession area is 6,200 Ha in Simenggaris, Nunukan, East Kalimantan with calorific value of 7000 Kcal/Kg. Medco expects a combined output of 500,000 tons per year from these concessions.

In 2007, Medco Mining once stated that it was seeking coal concessions in Lahat Regency, South Sumatra. Government also awarded a contract in Sekayu Block to develop coal-bed methane (CBM) to Medco last year.

READ MORE!!!