Berau Coal Energy

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PT Berau Coal Energy Tbk is Indonesia's fifth largest coal producer.

History

Berau Coal Energy was created in 1983, following the signing of a contract with the Indonesian government as sole mining contractor within the Berau regency of North Kalimantan. Production began in 1994.

Production

Berau Coal operate three active mines--Lati, Sambarata, and Binungan--at a single site in North Kalimantan. Estimated resources of about 2.6 billion tons, with probable and proven reserves estimated at 512 million tons (mt), lie within a single concession of around 118,400 hectares.

All three mines produce thermal coal, using conventional open pit mining techniques,primarily to supply the Chinese market.

Controversies

Berau Coal was once part of the assets of Asia Resource Minerals, the renamed Bumi Plc, which Vallar bought a stake in July 2010.

After a series of internal disputes, board room battles and court inquiries into “financial irregularities” at Berau Coal, Amir Sambodo agreed to resign in March 2015 as president director of Berau. However, he failed to relinquish the position and refused to allow Asia Resource’s chief financial officer, chief mining officer or his successor into the head office of Berau. For a while, Bumi executives acting on behalf of Rothschild only had limited access to Berau’s accounting systems and bank account information.

Defaults

Berau Capital Resources Pte issued US$450 million worth of 12.5% guaranteed senior secured notes, in 2015. PT Berau Coal Energy also issued US$500 million worth of 7.25% guaranteed senior notes in 2017. While these were to be restructured under an agreement with bondholders, the company later did not proceed with the deal. Both the 2015 and 2017 notes are currently in default. Since July 2015, the Berau Group has brought 4 separate rounds of scheme of arrangement / moratorium proceedings, with terms which have been described as “frankly insulting” at a time when global coal prices had doubled.

Suspension from the IDX

Berau Coal Energy has been delisted from the IDX since 16 November 2017, following multiple suspensions over the course of the last 2 years and failure to submit timely annual reports and financial statements since 2014.