Geo Energy Resources has inked a US$150 million ($199.1 million) contract for the construction and development of its Integrated Infrastructure with the consortium, CCCC-FHC and NORINCO, two of the largest state-owned Chinese enterprises.
As announced on Aug 1, the group had exercised the option to become the majority shareholder of PT Marga Bara Jaya (MBJ) and possesses majority control over MBJ in terms of number of board seats. In addition, the group also announced that it entered into a cut and fill contract to commence the development of the Integrated Infrastructure.
Charles Antonny Melati, executive chairman and CEO of Geo Energy says: “Our Integrated Infrastructure is strategically designed to minimise transportation time, achieve substantial cost savings in our logistics operations and provide a captive market for natural resources in that region and diversify the Group’s revenue stream as an infrastructure provider. This development is expected to be completed between late 2025 and early 2026.”
“The Integrated Infrastructure will allow the group to ramp up production up to 25 million tonnes per annum, with logistical cost savings of up to US$10 per tonne. Assuming the coal price remains at the current levels, Geo Energy will then be able to generate an estimated US$400-US$500 million EBITDA per annum.”
“In addition, we have signed a non-binding cooperation MOU with the Contractor, which open doors for future potential collaboration, allowing us to leverage on the technical expertise and financial capabilities of two of China’s largest state-owned enterprises. This strategic partnership is poised to bring us closer to our vision of becoming a billion-dollar company, making it an exciting time for our investors.”
Shares in Geo Energy closed at 28 cents on Aug 6.
