The GS Group will make a foray into the coal development business in Indonesia.
GS Energy announced on April 20 that the company concluded a contract to acquire a 14.74% stake in BSSR Coal Mine on Kalimantan Island (Borneo Island) in Indonesia forUS$45 million (54 billion won) with GS Global. Equity investment is 9.74 percent byGS Energy and 5 percent by GS Global.
Baramulti Suksessarana holds a 50-percent equity of BSSR Coal Mine, an Indonesian coal mining company as its largest shareholder and Tata Power, India's largest power company, a 26-percent equity
"The participation in this project will allow us to secure a right to sell the volume of coal corresponding to the stake and supply it to the Asian market for industrial and power generation," a GS energy official said.
BSSR Coal Mine is made up of two bituminous mines, one in southern Kalimantan Province and the other in eastern Kalimantan Province in Indonesia. Its reserves are about 140 million tons, and its annual output is about 10 million tons. GS will secure 1.5 million tons of coal per year at BSSR Coal Mineaccording to its stake.
Coal produced in BSSR Coal Mine is low-sulfur coal which is superior in terms of marketability, according to GS Energy. Also, BSSR Coal Mine is close to a coast so it is advantageous in terms of geographical location and a canal was built nearby, which increasesthe price competitiveness of its coal.
In particular, the deal in Indonesia has empowered GS Energy, a holding company in the Energy Division of the GS Group, to further diversify its energy business portfolio by expanding its operation areas to the coal mining business following the current oil refining and chemicals (GS Caltex), electric power and mass energy, andthe development of liquefied natural gas (LNG)development and crude oil.