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Coalminer Black Diamond Resources seeks up to $15.5 million from IPO
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Coal role: Heavy machinery is used to load coal onto trucks at the Karya Citra Nusantara (KCN) Marunda Port in Jakarta on Jan. 17. Exports of commodities like coal have helped the country maintain economic growth. (AFP/Adek Berry)
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oalmining company PT Black Diamond Resources expects to raise Rp 227.5 billion (US$15.5 million) through an initial public offering (IPO) in August, mainly aimed at covering the company's working capital, including its capital expenditure (capex).
The firm plans to offer 1.75 billion new shares, equivalent to 25.93 percent of its enlarged capital, according to the prospectus released on Friday. The shares would be offered at a selling price between Rp 100 and Rp 130 apiece.
Meanwhile, Sujaka Lays, who is also president director of rubber trading company PT Indo Komoditi Korpora (INCF), will have a 52.5 percent stake in the company.
The company said that proceeds from the IPO would be added to its subsidiary PT Dayak Membangun Pratama’s capex to upgrade its coalmining infrastructure.
The remaining funds will be allocated to repay a principal loan from contractors PT Heral Eranio Jaya and CV Putra Jaya. As of Aug. 15, PT Black Diamond Resources owed Rp 30.88 billion to the two companies.
“This is in line with increasing coal prices and the ongoing development of [our] mining site in Gunung Mas [Central Kalimantan],” the company said in the prospectus.
Read also: Decade-high coal prices drive strong H1 mining performance
The mining industry is a major contributor to non-tax state revenue for Indonesia, the world’s top coal-exporting country. Miners contributed Rp 70.05 trillion to the country’s total non-tax state revenue of Rp 452 trillion last year.
The country’s coal production is predicted to increase this year, assuming the pandemic continues to decline and the weather returns to normal, according to the 2022 Bloomberg Intelligence Report.
Indonesia’s benchmark coal price (HBA) hit $323.9 per ton in June, the highest since the Energy and Mineral Resources Ministry first recorded its HBA in 2009, energy ministry data show.
Newcastle coal futures, the benchmark for thermal coal in the Asia-Pacific, were trading on Friday at $407.6 per ton, up 1.6 percent from the previous day at $401 per ton.
