BHP Billiton weighs exiting coal assets in Indonesia

BHP Billiton is considering quitting its coal assets in Indonesia, where it recently started shipping steel-making coal from a small mine, amid uncertainty over Indonesian regulations and a weak outlook for coal.

BHP owns a 75 percent stake in the IndoMet Coal project, having sold the rest to Indonesia’s Adaro Energy in 2010 for $335 million. Coal asset prices have collapsed since then, and analysts said BHP would be lucky to fetch $200 million now for the stake in a largely undeveloped resource.

“Does it move the dial for BHP? No. But it’s a really high quality met-coal property and potentially a fantastic opportunity for an Indonesian company with the right connections,” said Shaw & Partners analyst Peter O’Connor.

BHP, the world’s largest exporter of metallurgical coal, is considering a range of options for IndoMet, a spokeswoman said. She declined to comment on whether the company has entered into talks with any potential buyers for its stake.

BHP Billiton is conducting a strategic review of the long-term future options for its Indonesian coal interests, IndoMet Coal, which comprises seven coal contracts of work within the provinces of Central and East Kalimantan,” the global miner said in its quarterly review.

Adaro spokeswoman Febriati Nadira said the company had no plans to buy BHP‘s stake.

IndoMet started producing last year from the 1 million tonnes a year Haju mine, where BHP has come under fire from environmental groups. The mine made up less than 2 percent of BHP‘s metallurgical coal output in the first nine months of this fiscal year.

BHP has held off approving larger developments in Indonesia, awaiting more certainty on government regulations.

Adaro says the IndoMet assets holds at least 1.27 billion tonnes of coal resources.

Indonesia’s director of coal mining at the Energy and Mineral Resources Ministry, Agung Pribadi, said he was unaware of BHP‘s review of IndoMet.

Also read:

Australia: Anglo American’s coal assets might be valued at $1.5b for sale

Maersk, Otto sign $30m drilling deal in PH

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.