Coal miner Geo Energy Resources (SGX:RE4
) announced that the MBJ Integrated Infrastructure has begun operational on July 16, with the first loading operation from PT Triaryani (TRA) coal mine of around 50,000 tonnes of shipment valued at around US$3.2 million ($4.1 million).
Geo Energy expects this new infrastructure to increase its EBITDA by up to US$350 million per annum solely from the cost savings generated from TRA coal mine, where it targets to achieve full capacity of 25 million tonnes per annum in the next few years, subject to Rencana Kerja Anggaran Biaya (RKAB) production quota approvals.
Apart from the cost savings, the new infrastructure will also generate new recurring earnings for Geo Energy as it could monetise the excess hauling and jetty capacities.
Through leasing the remaining capacity to surrounding miners, it is projected to generate recurring third-party EBITDA of up to US$250 million per annum.
Geo Energy believes that with the new infrastructure going operational, it will be able to ramp up the TRA coal volumes significantly and targets an increase of over 100% of its coal sales to around 8 million tonnes for the second half of the year.
“The commencement of our first loading operations on MBJ's Integrated Infrastructure marks the beginning of a new phase in the Company’s growth strategy and establishes an integrated logistics corridor to support the efficient transportation of coal products to domestic and international markets, positioning the Group to capture future growth opportunities while reinforcing its competitive advantage,” says Charles Antonny Melati, executive chairman and CEO of Geo Energy.
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Shares of Geo Energy closed unchanged at 55.5 cents on July 16.
