United Tractors Completing Due Diligence On Two Coal Mines In Central Kalimantan

PT United Tractors Tbk (UNTR) recently doing a due diligence with two coal companies in Central Kalimantan. Acquisition funds will be taken from the rest of the rights issue amounting to U.S. $ 75 million. "We're completing due diligence with the two coal mining companies in Central Kalimantan," said Investor Relations UNTR, Ari Setiyawan in Jakarta.

Ari said, the two mines are located near the mining area of PT. Tuah Turangga Agung (TTA) newly acquired last year. Those targeted mines has a minimum of 20-40 million tons of coal reserves. "The locations close to the TTA. Reserves we were looking for between 20-40 million tons. The two mines were still green fields (not producted yet)," he said.

Ari said that due dilligence process has started since early August 2009. Usually, Ari continued, this process will take approximately 3 months. "We hope the results will be already on October. If suitable, November or December can be acquired," he said.

Unfortunately, Ari can not provide the estimated acquisition value of the mine. But the plan, UNTR will only take 1 mine from the two mines that are in due diligence. "The value could not be mentioned. But we'll take one, if appropriate," said Ari.

Although no specific value, Ari said the company has prepared a special budget for acquisitions. The fund will be taken from last year's rights issue funds. "The remaining funds of rights issue still U.S. $ 75 million. For the acquisition it will be used entirely from there. If still less, we can find external funding," said Ari.

For the development of mining infrastructure which would be acquired, Ari said the cost would not be too large. Proximity of the targeted mines that not far from the TTA makes the company no longer need to create its own infrastructure for new mining area.

"The location near the TTA. So the infrastructure can come from the TTA. At that time TTA infrastructure investments of about U.S. $ 35 million. For the new mines will not be so big," said Ari.

Until now, United Tractors already has two coal mining subsidiary, PT Dej Mining and TTA. PT Dej Mining already operating and will produce 2.5 million tons of coal this year. "TTA operate around November-December this year. The goal, next year TTA production reach 1 million tons. So next year our coal production of about 4.5 million tons," said Ari.

For the new mines would be acquired later this year, the plan will be operated in late 2010 or early 2011. "The target, the new mine will produce 1 million tons in 2011. Our target in the year 2012, we are able to produce 10 million tons of coal," Ari said.