The 9700-hectare concession in the country’s West Sulawesi province claims a 205Mt indicated coal resource and is currently owned by Indonesian company PT Tambang Sekarsa Adadaya.
PHI will pay a total of $5,250,000 in common stock and $5,250,000 in cash for a 70% stake in Tambang.
Both companies expect to close the transaction by March 2013.
Specifications from laboratory analysis of coal samples at the concession include a gross calorific value of 6278 Kcal/Kg, total moisture of 6%, total sulphur of 0.87% and 17.1% ash.
For reference purposes, free on board price of this coal grade is $75 per tonne. PHI said it intends to set the production level at 3Mt per annum by the second year of full operation.
This transaction represents part of PHI plan to accumulate a sizable portfolio of coal assets to respond to the increasing demand for coal in the Asia-Pacific region.
Annual world coal demand is expected to grow from 7.6 billion tonnes in 2011 to 8.9Bt in 2016 and more than 85% of global demand growth will come from China and India.