Clough AU$180m four-year extension to GBP coal contract
Posted: 10 December 2004
Clough Limited’s Indonesian subsidiary PT Petrosea Tbk signed a contract for a A$180 million (US$140 million), 48 month extension to its long-term coal overburden stripping contract in East Kalimantan.
The work for PT Gunungbayan Pratamacoal (GBP) was first awarded to Petrosea in November 1999 – at the time it was one of the biggest contracts in the then 27 years in which Petrosea had been operating in Indonesia.
In May this year, Petrosea commenced a US$20 million, eight month extension of the GBP contract until December 31, 2004.
Mr Micheil E. Anderson, President Director of Petrosea, said: “Securing this long-term extension of the GBP mining contract provides a very solid base for Petrosea’s operations and growth in the next four years.
“We are already well engaged in opportunities to win new contracts in both the minerals and the oil and gas sectors in the region,” he said. “We are continuing to provide major support to other large mining operations and we also see good prospects for Petrosea in infrastructure development in Indonesia. We have taken a strategic business decision to focus on new work in the ownership, construction, operations and maintenance of water treatment facilities, to add to the company’s growth. The first of these rehabilitation projects has now been awarded.”
Improving profits and operating cash flows, plus a healthier market outlook, saw Petrosea make a special ‘catch up’ dividend payout to shareholders in September this year. Petrosea had not paid significant dividends for quite a few years but has remained profitable and has been converting its profits into significant cash holdings.
Prior to the special dividend payment, Petrosea had US$76 million in assets, of which about US$30 million was held in cash. The special dividend payout to shareholders totalled US$4 million - equating to about Rp360 dividend payment per share.
By the end of the current contract extension to the end of 2004, Petrosea’s work for GBP will have generated revenues of over US$120 million and seen the movement of more than 100 million cubic metres of material over the past five years.
The contract extension announced today will also see Petrosea commit approximately US$28 million in capital investment over the next two years for new and refurbished major load and haul plant and ancillary equipment at the GBP mine site.
Mr David Singleton, CEO and Managing Director of Clough Limited, said: “The extension of the GBP contract further vindicates our strategic decision earlier in the year not to proceed with a planned sell down of the group’s interests in Indonesia. Instead we elected to concentrate on rebuilding the Petrosea business as a unique gateway into the growing Indonesian market. This latest contract is a product of that deliberate strategy.
“This is also part of the group’s drive to pursue a multi-market strategy in oil and gas, as well as minerals. We will pursue further opportunities for minerals work in the region through Petrosea and, where appropriate, by promoting our new joint venture with Murray & Roberts.”
GBP mines high quality, low sulphur coal in Muara Pahu District of East Kalimantan. The resource is exported to Asia and Europe through Balikpapan as semi soft coking coal (SSCC) and high calorific value coal (HCVC).
For more information see www.clough.com.au
Posted by Richard Price,
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