Dec 29, 2010

Delta Dunia seals US$500 mio contract

Coal mining contrator PT Delta Dunia Makmur Tbk (DOID) has secured US$400 million-US$500 million 5 year contract from PT Berau Coal through a tender process.
Delta Dunia Director Rani Sofjan in a press statement obtained by Bisnis today said the contract is for Pit East 2 of Berau’s Lati mine site and has a total production target of 226.8 million bank cubic meters of overburden and 20.7 million tons of coal. 
The projected value of the contract is approximately US$400-500 million, subject to hauling distance adjustments over the life of the contract.
Production associated with the contract is expected to commence in March 2011. "This contract is in addition to the existing Buma [PT Bukit Makmur Mandiri Utama]–Berau contracts that expire in 2018," Rani said in the statement.
In a morning note distributed by PT Mandiri Sekuritas, the new contract potentially gives additional revenue to Buma at approximately US$85 million per year or US$8.5 million to bottom line. Delta Dunia stocks are unchanged today at Rp1,600 per share.

Disclosure: No position at the stock mentioned above.

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