IDX-listed coal mining firm PT ABM Investama Tbk (IDX: ABMM) is preparing to diversify its business by venturing into gold mining. This move aligns with the company's roadmap, which aims to expand beyond coal mining into other mineral sectors.
ABMM Director Hans Christian Manoe explained that the decision to enter the gold business is driven by the company’s goal to diversify its EBITDA sources, reducing reliance on coal. The company sees opportunities in the gold sector, noting that there are relatively few players in this market and that gold mining appears more feasible compared to other minerals such as nickel and copper.
"We are evaluating the feasibility study (FS), including margins and EBITDA, while also considering processing techniques. Strategically, this is our approach," said Hans at a media event on Thursday (March 6).
Currently, the company is exploring potential gold mining assets. Two assets are already in ABMM's pipeline, both of which are brownfield sites with relatively small production capacities.
This smaller capacity aligns with ABMM's strategy of initially acquiring a minority stake in gold mines. Hans added that the company is focused on learning and reaching a comfortable operational level before increasing its ownership.
However, Hans emphasized that ABMM’s acquisition or expansion into mineral businesses will be conducted cautiously, given that the company is held by many shareholders. As such, the company is working with trusted consultants to assess which assets are worth pursuing.
Several factors will influence ABMM's decision, particularly the gold reserves of potential mines. "We want to ensure that the mine will operate for more than five years, as this is crucial for project financing. We plan to fund 75% of the project through bank loans and 25% through equity. The loans would only be repaid within five years, so the project must generate sufficient returns within that period," Hans explained.
Cancelled acquisition
Regarding ABMM’s decision to cancel its acquisition of two companies owned by PT Citra Tubindo Tbk (CTBN)—namely PT Sarana Citranusa Kabil (SCN) and PT Citra Pembina Pengangkutan Industries (CPPI)—Hans clarified that the move was purely based on business factors that were not initially considered in ABMM's long-term strategy.
"When we signed the CSPA (Sale and Purchase Agreement), things can change before we finalize the SPA. Upon reassessment, we concluded that the acquisition didn’t align with our long-term business calculations," Hans said.
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ABMM had planned to acquire 94% of SCN’s shares and 99.9% of CPPI’s shares through its subsidiary PT Cipta Krida Bahari (CKB). "After reconsidering the purchase of all SCN and CPPI shares, CKB and CTBN mutually agreed to terminate the transaction and end the PPJB for SCN and CPPI," Hans explained.
SCN specializes in seaport services and related activities, while CPPI focuses on port services and other similar operations.
Hans stressed that the cancellation would not have any material impact on the company’s operations, legal standing, financial condition, or business continuity.
New acquisition deal
On March 3, ABM Investama, through its 100%-owned subsidiary PT Reswara Minergi Hartama (RWA), signed a share sale and purchase agreement (PPJB) to acquire shares in PT Piranti Jaya Utama (PJU) for US$57 million (approximately Rp934.44 billion) from PT Tuah Turangga Agung (TTA), a subsidiary of PT United Tractors Tbk (UNTR).
"RWA has signed a PPJB with TTA to purchase 100% of TTA’s stake in PT Borneo Berkat Mamur (BBM), which directly holds a 60% stake in PJU," said Hans.
Additionally, RWA has also signed a PPJB with Borneo Prima Pte Ltd, Edward Sumarli, and Herry Hermawanto for a stake in PT Borneo Berkat Sentosa (BBS), which holds a 40% stake in PJU.
"The parties must meet all conditions set in the PPJB before they can sign the final sale and purchase deed, which is scheduled for the 11th quarter of 2025. After fulfilling all conditions, RWA will own all of the shares in PJU," Hans added.
This acquisition aligns with ABMM’s strategy to increase its portfolio of fully owned coal reserves. "The share purchase will proceed once all PPJB conditions are met," Hans concluded.
Editing by Reiner Simanjuntak
