Indika Energy (INDY) is spurring business development in various sectors this year

PT Indika Energy Tbk (INDY) is determined to continue to develop its business throughout this year.This company not only focuses on the coal mining sector, but also in other business sectors.

Indika Energy’sHead of Corporate CommunicationRicky Fernando said the company is trying to take advantage of the momentum of rising coal prices that have started happening since late last year.INDYalso targets coal production of 31.4 million tons by 2021.

Just so you know, this figure is actually lower than the coal production target set in 2020 which was 33 million tons.

The reduction inINDY’sproduction target,according to Ricky, is in line with the national coal production target, which has not changed this year.”We continue to optimize production and improve performance effectiveness to ensure production is in line with the target,” he said, Thursday (28/1).

INDY management has not been able to submit data on the realization of coal production until the end of last year.As for the third quarter of 2020,INDYthrough its subsidiary Kideco Jaya Agung produced 23.9 million tons of coal.Meanwhile, coal production from the Multi Tambangjaya Utama (MUTU) mine reached 1.3 million tons.

To support business this year, this member of theKompas100index, provides acapital expenditure(capex) of around US $ 130 million.Most of the capex is used for the business continuity of INDY’s subsidiary, PT Petrosea Tbk (PTRO) as well as to maintain the continuity of operations of other subsidiaries.

“Our sources of funding come from the internal cash of each subsidiary and bank loans,” added Ricky.

Furthermore,INDY isalso expanding its business wing through the Awak Mas gold mine project in South Sulawesi.There, INDY through its subsidiary PT Indika Mineral Investindo (IMI) partnered with PT Masmindo Dwi Area.This company is a subsidiary of Nusantara Resources Ltd which manages the Awak Mas gold mine.

Currently, said Ricky, INDY owns 27.75% of shares in Nusantara Resources Ltd and 25% direct ownership of shares in Masmindo.INDY has the option to increase its share ownership in Masmindo to 40%.

The progress of the Awak Mas gold mine project itself is going well and is now in the Front End Engineering Design (FEED) stage.This gold mine is expected to start commercial operations in 2022 or 2023.”This project is estimated to be able to produce as much as 100,000 ounces of gold per year,” said Ricky.

Prior to the gold mine,INDYhad also realized one of its business diversifications, namely the operation of a fuel oil (BBM) storage terminal in Balikpapan, East Kalimantan since November last year.The project is valued at around US $ 115 million.

For now, the INDY fuel storage tank is exclusively for ExxonMobil.Ricky cannot confirm whether there will be new customers renting the tank in the near future.Apart from that, the EBITDA potential obtained by INDY from the business is predicted to be around US $ 15 million-US $ 18 million per year.

Not to forget, Ricky also said, in accordance with the company’s commitment, INDY will continue to diversify its business and explore potential business sectors in the future, including in the renewable energy sector.

Quoting previous news, INDY management hopes that these diversification efforts can make the contribution of revenue from the non-coal sector to increase to 50% by 2025.