Indonesia’s Geo Energy signs $150mn contract for coal project

Indonesian coal producer Geo Energy has inked a $150 million deal for the construction and development of a 92-kilometre coal hauling road and loading jetty in Jambi province, South Sumatra.

The infrastructure is slated for completion by late 2025 or early 2026 and will boast a capacity of 40 million to 50 million tons per year.

State-owned Chinese enterprises First Harbor Consultants and Norinco International will be responsible for the development of the new infrastructure, which is crucial for TRA’s goal of increasing production to 25 million tons, according to Geo Energy.

Geo Energy specialises in low-calorific value coal and reported coal sales of 1.8 million tons in January-March, a 5.3 pr cent decrease from the previous year.

Production also declined by over 16 per cent to 1.5 million tons during the same period due to seasonal and weather factors.

In July 2023, Geo Energy acquired stakes in Golden Eagle Energy and Marga Bara Jaya, providing access to more than 300 million tons of proven and probable coal reserves in south Sumatra.

The company is confident in achieving sales of 10-11 million tons this year, with expectations of increased output in the second half.

It has secured a production quota of 10.5 million tons for 2024, including 8 million tons from its SDJ and TBR mines and an additional 2.5 million tons for TRA.

Attribution: Argus report