A unit of ABM Investama has secured a contract to supply 255,000 metric tons of coal to Lafarge Cement Indonesia, a cement maker with operations in Aceh, Indonesia’s westernmost province.
The contract, which was secured by Media Djaya Bersama, will be valid for one year, the company said in a statement on Monday.
Media Djaya Bersama is a unit of Reswara Minergi Hartama, a coal miner and distributor controlled by ABM Investama.
“Through this contract, our coal will be used to help support the development of industries in Aceh. We have big hopes to continue securing coal selling contracts with other partners that can help boost the economic growth in the province,” Reswara’s president director Harry Asmar said in Monday’s statement.
Coal sold by Media Djaya will be used to fire up Lafarge’s cement plant. The contract is valid for a year, but could be extended to five years.
“The prospect to extend the contract to 2018 has been discussed by both [companies],” Harry said.
The company did not disclose the value of the contract. Reswara and Lafarge signed the coal deal on Wednesday last week.
Andi Djajanegara, president director at ABM Investama, said the coal sales contract has expanded ABM’s market at home.
“This contract shows demand [for coal] remains strong,” he said.
Andi said ABM Investama is encouraged to also speed up construction of some coal-related facilities in Aceh, as well as some infrastructure projects.
In Aceh, ABM Investama plans to build a coal crusher, renovate a 12.5-kilometer road for transportation, and build a stockpile, barge loader, offices and other facilities to support its coal operation.
With the new contract with Lafarge, Reswara has sealed a third of its coal sales contract target for this year. In 2013, Reswara is aiming to secure coal sales contracts for six million metric tons.
The company has also sealed deals to sell coal to Avra Indonesia, part of the Avra Commodities and Guangzhou Huaneng Trading Co. from China. Avra is a Singaporean trading company.
ABM Investama is the integrated unit of Tiara Marga Trakindo.
Tiara Marga Trakindo, owned by the Hamami family, is a diverse business that focuses primarily on heavy equipment, coal mining and power plants.
The Hamami family, one of the wealthiest families in Indonesia, earned their fortune in the heavy equipment business through the Trakindo Group.
Reswara Minergi controls coal reserves of 550 million metric tons through four concessions, spread throughout South Kalimantan and Aceh.
Reswara took over 70 percent stake of Media Djaya in June 2011.