As everyone knows, each crisis offers also its opportunities. One of these opportunities consists in the option to participate in coal mines in Indonesia now. Today, the island-state Indonesia has become the world’s most important exporter of steam coal. In the past year alone, Indonesia extracted and exported more than 260 million tons of steam coal. Its high quality and low sulfur content make this coal from Indonesia very interesting for the power generation in the whole world, and as a matter of fact primarily also in Asia.

No wonder that at present many Chinese companies and investors are trying intensively to get an access to Indonesia’s coal mines. The future prospects are excellent and whoever gets into the right position now, will be a key player during the next coal boom, and will decide how and, especially under which conditions the coal will be distributed on the markets. 

As a matter of fact, also the price for steam coal dropped by approx. 40 percent due to the current crisis. This concerns, however, mostly those supplies which were made CIF. This means that the price decline was not due to the product itself but much rather to the freight costs. The sheer coal price ex mine has almost entirely remained unchanged during the crisis. This becomes clear considering that still in October 2008 the freight charges for the distance from Indonesia to China and/or from Indonesia to India amounted to approx. 32 USD per ton, whereas barely 9 USD per ton need to be spent at the beginning of April 2009. This price decline for coal free port of destination, which was triggered in October of the last year, is almost entirely due to the reduction of the freight rates, and not to the reduction of the coal price itself.

According to all experts this is going to stay like this, especially also since the demand for coal has neither collapsed nor decreased. Quite to the contrary, Korea for example announces its highest import rate for steam coal of all times for January 2009. And according to all available information today, this tendency will continue. Steam coal is a raw material, which is determining on the markets and to very large extent independent from crisis situations. And Indonesia will be able to further extend its market dominating position in Asia. But to do so, the country also needs assistance, in particular in the form of additional investments and know-how for logistics and marketing.

Since long, the Chinese have understood the strategic importance of the Australian and Indonesian coal mines for their own country and are consequently trying to put as many mines as possible under their control, which however will not be that simple in the light of the special structures the Chinese are confronted with in Indonesia. Indonesia, on the other hand, already traditionally has cultivated a very special connection to Europe and in particular to Germany since many years now. Many of the engineers working in the mines studied at the RWTH in Aachen, and German companies have earned an excellent reputation in the country. This is the reason why it would be a good moment for European investors to participate in an assisting and supporting fashion in the coal mines in Indonesia, which would offer considerable advantages to both sides.

The ORGAKOM group has now been given the possibility to participate in coal mines in Indonesia and to consequently promote their technical and infrastructural development and to organize the marketing of the coal on a global scale. To realize all these projects, ORGAKOM is looking for investors to build up the required financial background for these projects. 

In a first step, it is planned to participate in three mines in Kalimantan / Indonesia. These mines together offer a production capacity of 120,000 tons of steam coal with a calorific value of 6,100 kcal/kg. This means that 1.2 million tons of steam coal could be produced and marketed per year of operation. The territory of these three mines currently authorized for excavation works comprises approx. 6 million tons of steam coal. 

In a first step, an investment volume of approx. 13,000,000 USD is planned for the development of the first three mines and the corresponding participation, in which an investor in addition to the 100% securing of the capitals through securities from TOP 25 banks, would get a guaranteed interest yield in the amount of approx. 20% for the investment capital, which would also be secured by the banks. In addition to this, each investor would be granted a buying option for steam coal at special conditions and/or a participation allowance for the duration of the participation in the amount of 10.00 USD per extracted ton. This participation capital can already be released and/or be reimbursed after 12 months.