Geo Energy Resources has signed non-binding term sheets with two mining groups for the use of a road it is building in South Sumatra to bring coal from their mines to a jetty for export.
Besides producing coal itself, Geo Energy Resources has an infrastructure unit PT Marga Bara Jaya (MBJ) that is building this 92-km road and the associated jetty.
Construction began last August and is slated for completion in the first half of 2026.
The first agreement is a 50-year deal with PT Thriveni to transport 15 million tonnes of coal per year from January 2028.
MBJ has also signed a ten-year agreement with PT Astaka Dodol to move up to 10 million tonnes of coal per year starting next July. The agreement can be extended.
The road and jetty will also be used by Geo Energy's own TRA coal mine, which will increase its output to up to 25 million tonnes per year over the next few years.
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MBJ's road is projected to have a total annual capacity of between 40 and 50 million tonnes per year.
In addition, Geo Energy has signed an MOU with its key shareholder Resource Invest to invest between US$50 and US$100 million into MBJ and other investments.
According to both parties under this MOU "at full capacity, MBJ's valuation should exceed US$1.5 billion".
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As part of an offtake agreement last February for the TRA mine, Resource Investment had previously invested US$30 million in Geo Energy.
Geo Energy Resources shares closed at 32 cents on March 17, up 3.23% for the day and up 10.34% year to date.
