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.
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