Publicly listed PT Adaro Energy, the nation's second largest coal producer, has paid US$60 million for sole ownership of a concession contested by publicly listed plantation company PT Astra Agro Lestari (AAL).

Adaro director and corporate secretary Andre J. Mamuaya said in a statement to the Indonesia Stock Exchange (IDX) on Tuesday the company had resolved the 10-year-old dispute by agreeing to purchase the concession.

The company appointed PT Alam Tri Abadi to buy the 7,163 hectares plot, which was controlled by Astra's subsidiaries PT Cakung Permata Nusa and PT Cakradenta Agung Pertiwi.

Andre said the payment had been made on Aug. 28 after the two companies had signed a settlement deal in February, in which Adaro had paid $3 million as an advance.

With the dispute settled, Adaro now holds the right to carry out exploration activities on the concession, which is in Tabalog, South Kalimantan.

However, in its statement to the IDX on Monday, Astra said it retained the right to develop the plot until 2012, as had been agreed by the two companies.

The dispute began in 1999 when the government issued a license authorizing both companies to manage the concession.

The land is a part of Adaro's coal concession called Wara, which has a total coal reserve of 329 million tons. The concession is slated to start production in 2009 with an initial production of up to 5 million tons.

Adaro has targeted its total coal production to hit 80 million tons in 2012 from this year's target of 38 million tons. Last year, Adaro produced 36 million tons of coal.

Popular

Indonesia rolls out one-day remote work in push for energy efficiency

At the mercy of the market

Indonesia calls Israel death penalty law 'grave violation' of human rights