Fresh acquisition and billion-dollar deal fuel Geo Energy’s rise in Asia’s coal industry
Geo Energy focuses on coal production and coal trading – owning
three mines in Indonesia’s East Kalimantan and South Kalimantan provinces
The growth of the coal industry may have been sluggish over the past few years because of falling demand – but for Indonesian coal miner Geo Energy Group, last year was a milestone year, kindling the fires of a promising future.
Under an offtake deal signed in December last year, Geo Energy will supply approximately 8 million tonnes of coal from its newly operational Sungai Danau Jaya mine to Engelhart Commodities Trading Partners (Singapore) by the end of the year. Hot on the heels of the estimated US$1.2 billion deal, the company is well on its way to becoming one of Indonesia’s top 10 coal producers.
“Coal is still one of the largest and cheapest sources of energy, and for developing economies in Asia where half the world’s population resides, it will still be a major source of energy,” says Tung Kum Hon, CEO.
“Indonesia has a power shortage. More than 50 per cent of power plants that will be built over the next 10 years will be powered by coal.”
Established in Jakarta, Indonesia, in 2008 and listed on the Singapore Exchange in 2012, Geo Energy focuses on coal production and coal trading – owning three mines in Indonesia’s East Kalimantan and South Kalimantan provinces, and with another acquisition pending completion. Ninety per cent of its coal is sold in China.
Led by a team of industry professionals with extensive coal mining experience, the group outsourced its mining operations to Bukit Makmur Mandiri Utama, one of the largest coal mining contractors in Indonesia, and it has an offtake agreement with major commodities trading house Engelhart Commodities Trading Partners, thereby cutting out high rental costs and technical inefficiencies.
Seeking to double its current coal reserves and explore higher quality coal, Geo Energy welcomes joint ventures and mergers with industry players in Asia. The group is in the process of acquiring Tanah Bumbu Resources, which is estimated to raise Geo Energy’s reserves to more than 90 million tonnes.
