MAC: Mines and Communities

Indonesia update

Published by MAC on 2007-03-09

Indonesia update

9th March 2007

Blacklisted Mining Companies must be Closed Down

Tempo Interactive

1st March 2007

Mining companies that have been blacklisted in the Evaluation Program of Company's Performance Rating in Managing the Environment (Proper) team from the Department for the Environment must be closed down. Witoro S., Technical Director for the Environment at the Department of Energy and Mineral Resources, said that the department would take a stern action against blacklisted companies.

"If these companies are incapable of carrying out further improvement, action will be taken against them," he said yesterday (02/28). The Department for the Environment should have announced the Proper results for companies in January but this has been delayed. Witoro said that the government must be cautious in announcing the Proper result, adding: "Because it will affect investment and image."

China Special Steel to acquire an Indonesian mining company

China Special Steel Holding Co. Ltd., a Hong Kong-listed steel mill, announced on March 6 that they would acquire an Indonesian mining company for HKD 2.73 billion ($349.27 million), in order to secure iron ore and nickel supplies.

The Indonesian mining company named S.E.A. Mineral Limited (S.E.A.), recently signed a 14-year contract with Indonesian Yiwan Mining Ltd for exclusive rights to mined metal ore from their iron ore and nickel mine.

The mine is located in Southern Kalimantan Province, in Indonesia, and contains 150 million tons of iron ore and nickel.

According to the announcement, Yiwan Mining will provide at least 1 million tons of metal ore to S.E.A. in the first year of the agreement, and will continue to provide no less than 3 million tons per year starting from the second year.

The acquisition will ensure a stable supply of iron ore and nickel at appropriate prices.

China Special Steel will issue 1.34 billion shares at a price of HKD 1.73 ($0.22) per share in order to raise a fund of HKD 2.318 billion ($296.57), which will be used to finance the acquisition. Deutsche Bank AG has already subscribed to 56.1 million shares.

Special Steel plans to issue HKD 625 million ($79.96 million) worth of convertible bonds to Deutsche Bank AG, with a conversion price of HKD 2.25 ($0.29) per convertible bond.

Net proceeds from the share subscription and the convertible bonds subscription amount to approximately HKD 700 million ($89.56 million).

China Special Steel is based in central China's Zhengzhou City, in Henan province, and mainly produces bearing steel and spring steel that is used extensively in the automobile and construction industry. The company issued 180 million shares in the Hong Kong IPO, in May 2005.

[Source: Interfax China, 9 March 2007]


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