Borneo Lumbung in talks to sell stake in coking coal unit

Indonesian coking coal producer Borneo Lumbung Energi & Metal is in talks to sell up to a 20% stake of its coking coal unit PT Asmin Koalindo Tuhup, its marketing director Ken Allan told Steel First.

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However, nothing has been signed or committed to yet.

Allan said that it has been an ongoing process for the company to find a “strategic partner” since 2010.

“There are a number of people who have looked at us and some continue to look at us and some are doing due diligence,” he said.

Allan declined to give out names, but said a strategic partner would best be a steel mill to enable offtake agreements aside from assisting in quality control and technology.

A Reuters report suggested that Korean steelmaker Posco has been involved in the talks and that the Indonesian miner could raise $500 million from the sale.

“Nothing has been put on paper at all yet,” Allan insisted.

Posco could not be reached immediately.

The Indonesian miner produced 3.3 million tonnes of coking coal last year, and plans to produce 4.5-4.6 million tonnes this year.