Andaman Group Expects Coal Mining To Contribute 30 Pct Of Net Profit

KODE PPC ANDA

Andaman Group, which involved in property development, forestry, plantation and mining, expects its recently-acquired coal-mining concessions in Indonesia to contribute 30 percent of the group's net profit this year, based on rising demand from India, China, Japan and South Korea.

President Datuk Dr Patrick Teoh Seng Foo said the two mining concessions were expected to start operations within three months with an initial production of 50,000 metric tonnes (MT) per mine monthly.

"This will be increased to 200,000 MT per mine later," he said.

He said this at a media conference after signing an agreement here today with Putra Dewa Jaya Group (PDJ) to acquire controlling rights for two coal-mining concessions in Balik Papan, East Kalimantan, Indonesia.

Teoh said the diversification into coal mining was a strategic move for the group as the demand for coal has increased tremendously due to the sharp rise in crude oil prices.

"The two mines, located in Kebapatan Kutai Kartanagara and Kabapatan Berau, have a combined proven coal reserves of more than 70 million cu metres. They are owned by PDJ and its subsidiary, PT Putra Bara Jaya.

"The Kutai mine produced high-quality coal and the Berau mine medium-quality," he said.

Teoh said upon completion of the acquisition, 40 percent would be retained by its Indonesian partners and 60 percent by its subsidiary, Andaman Resources Sdn Bhd.

"Both Andaman and our Indonesian partners will invest up to RM30 million in the concessions.

"We will use internal funds to purchase machinery and equipment," he said.

Teoh said approval to acquire another coal mine concession was expected by end-2007.

"The 5,000-hectare concession in East Kalimantan has a proven reserves of over 50 million cu metres of steaming coal," he said.

KODE PPC ANDA