United Tractors, a heavy equipment distributor controlled by Astra International, one of the largest Indonesian conglomerates, is acquiring a 95 percent stake in the Martabe gold mine in North Sumatra from Singapore-based Agincourt Resources.
United Tractors' chief financial officer Iwan Hadiantoro said the company expects to wrap up the $1.14 billion deal in the next four or five months.
"The fastest it will be in December," he told reporters on Monday (27/08).
Martabe has a total enterprise value of about $1.2 billion, according to United Tractors, which is Indonesia's largest heavy equipment distributor.
United Tractors will acquire the Martabe gold mine through its subsidiary, Danusa Tambang Nusantara. Its current owner, Agincourt, is a mining company belonging to a consortium led by EMR Capital, an Australian private equity firm focused on natural resources investing.
EMR has a 60 percent stake in Agincourt, in which US investment group Farallon Capital Management owns 20.6 percent, Indonesian tycoon Martua Sitorus 11 percent, and Djarum Group 7 percent.
According to Iwan, the company will fund the acquisition from its Rp 25 trillion ($1.71 billion) internal cash.
United Tractors president director Gidion Hasan said Danusa has signed the acquisition contract with Agincourt Resources on Aug. 8. If the process goes smoothly, the United Tractors' subsidiary will hold the Martabe mine concession until 2043.
United Tractors controls 60 percent of Danusa Tambang, while the remaining stake is owned by Pamapersada Nusantara, distributor of Komatsu heavy equipment in Indonesia.
The Martabe gold mine, which covers 1,303 square kilometers in South Tapanuli, produces about 350,000 tons of gold a year. It booked $150 million in net income last year.
According to Agincourt Resources annual report, Martabe, which is one of Indonesia's largest gold mines, has a potential reserve of up to 4.5 million tons of gold.
Many companies have shown interest in the mine. One of them was China's Pengxin International Mining, which was reportedly trying to acquire Martabe from EMR Capital for about $1.5 billion.
United Tractors Still Rely on Coal Industry
On Tuesday, United Tractors' Gidion said the company is still making most of its profit from selling heavy equipment and from its services to mining contractors. United Tractors' portfolio also covers a coal mine, a power plant, and a gold mine.
As 90 percent of the company's revenue still comes from mining-related services, Gidion said United Tractors wants to lower it to 65 percent, or 55 percent in the next three to five years.
United Tractors also holds concession rights to eight gold mines in Sumbawa, West Nusa Tenggara. The company is currently constructing its gold processing plant, which is slated for completion by 2019.
Source: Sarah Yuniarni / The Jakarta Globe
29 August 2018