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BHPB to sell 20pct to 25 pct stake in Indonesia Maruwai coal

Thursday, 28 Jan 2010
Reuters reported that Mining group BHP Billiton wants to sell a 20% to 25% stake in its Maruwai coal project in Indonesia Kalimantan on Borneo Island.

The decision to keep a majority stake, after BHP last year signaled it would not develop the project in the world's top thermal coal exporting country may show bids for the whole project were too low or that BHP sees better coal fundamentals.

Mr Indra Diannanjaya president director of PT Juloi Coal one of seven coal miners in the BHP Maruwai project said “We want to keep a majority stake in the Maruwai coal project. So we are looking at selling a 20% to 25% stake.”

He however added that “But if a business deal fails to take place, BHP would retain 100%. We are financially capable of developing the project.”

Mr Diannanjaya did not say why BHP was keeping a majority stake, but said no decision has been made on a winning bid.

As per report, BHPB has received bids both for 100% of the project valued at roughly USD 500 million and also for 25% stakes.

Sources told Reuters last year Indonesian coal miners PT Bumi Resources, PT Adaro Energy and PT Indika Energy were among the bidders for the Maruwai coal project. Local Indonesian media have reported Adaro is the likely winner.

Mr Diannanjaya said the Maruwai coal project is expected to start commercial production in 2014 and output is then seen reaching 6 million tonnes of both thermal and coking coal within five years.

He said that the project will need between USD 500 million and USD 1 billion to produce 6 million tonnes. BHP plans to build a railway connecting the mine to the nearest barge-loading ports to help expand production.

BHP Billiton said in June last year it would not go ahead with the first stage of the project because it did not fit with the company's long-term investment strategy, but government officials said subsequently it was opting to sell a stake.

(Sourced from Reuters)
http://www.steelguru.com/news/index/MTMwNDk2/BHPB_to_sell_20pct_to_25_pct_stake_in_Indonesia_Maruwai_coal%250D%250A.html

[Last update: 2010-02-01 10:47:19]