JL to invest in coal mining

JL Emerging Markets Pte Ltd Singapore plans to increase its coal reserves holdings across Indonesia to at least two billion metric tons to supply its coal power plants in the emerging markets.

The company has been sourcing and acquiring coal concessions across Indonesia over the past year to secure an uninterrupted supply of thermal coal for use in its coal power plants.

The current economic condition has provided us with an opportunity to acquire these coal concessions at bargain prices compared to a year ago following the decline in coal prices in 2008.

Investments in the coal sector can be viewed as a safe haven as it is a necessary resource for many developed and developing countries in power generation. "Our ability to bank on these resources at current price levels will be detrimental to our future success and profitability says", Johan Luhur, Managing Director of JL Emerging Markets. To create a tight downstream integration with our coal mining operations, we saw an opportunity to participate in the power generation business. Emerging markets such as Indonesia, Bangladesh, Sri Lanka and Cambodia are facing severe power supply shortages, as a result of the population growth.

The company is pursuing talks with a number of governments to develop private public partnership coal power generation projects.

These countries have a specific and ongoing need for power supply to continue to develop but may lack the necessary funding and technical expertise to do so. Our consortium, which includes financial institutions and experienced power plant operators bring the necessary solution to this equation. Investor appetite for infrastructure projects continue to be high as the revenue stream are relatively unaffected by changing global economic conditions.

As such, primary funding commitments for these projects have already been secured by the company from institutional investors originating from various regions, including, China, the Middle East and Europe.

Coal concessions and power plants can be integrated to form mutually beneficial relationship. The ability to secure raw materials for power plants and the security of having a long term off-take agreement from the power plants creates this synergistic relationship.

The company will also be looking to raise additional capital for its future expansion by way of an initial public offering. Planning is currently underway for listing of both the resource and the energy business units on the SGX in Q3 2010.