Company Announcement to the Danish Financial Supervisory Authority No. 06-2011, 25 March 2011
FLSmidth has today signed a contract in Jakarta worth in excess of USD 135m (DKK 700m) with PT Adaro Indonesia, a subsidiary of PT Adaro Energy Tbk., to supply material handling equipment to its coal mine in the Tanjung district of South Kalimantan, some 1000 km from the Indonesian capital, Jakarta.
The material handling equipment will be part of Adaro's expansion of its mining operations and will decrease the average hauling distance of the overburden trucking operations as well as reduce the company's dependency on oil. The contract comprises an out-of-pit overburden crushing and conveying system, consisting of FLSmidth ABON sizers, RAHCO overland conveyors, and RAHCO mobile stacking conveyors. The system has a capacity of 12,000 tonnes per hour and an annual overburden volume of 40 million bank cubic metres. The contractual elements regarding construction, supervision and management, as well as field service, will be supplied by FLSmidth Indonesia.
"This material handling contract is the first in Indonesia and reflects a growing market in the region, particularly in the minerals sector where mining companies are expanding. Being the first of its kind in Indonesia, the project will act as a catalyst for other potential orders in the region and for our participation in the continued expansion of Adaro's mining activities, which makes the contract significant for FLSmidth," Group CEO of FLSmidth Jørgen Huno Rasmussen comments.
Handling of overburden represents one of the major costs and challenges in connection with open-pit mining operations. As mining companies expand and increase the depth of their mines, the amount of overburden rises and the demand for handling and removal equipment grows. FLSmidth's conveying systems can help solve this issue as a technological, economical and environmental alternative to traditional transport methods. FLSmidth has long been working on this solution in collaboration with mining companies across the globe and the contract with Adaro is now paving the way for this technology in Indonesia.
"Adaro has increased its production every year since 1992 and we are now among the top five exporters of thermal coal in the world - and all from just one site. Overburden mining and haulage is one of our biggest challenges. In 2010 we hauled 226 M bank cubic metres of overburden, and this year we are planning to haul more than 290 M bank cubic metres. The equipment supplied by FLSmidth will increase the efficiency with which this large amount of overburden is transported and help secure Adaro's unbroken track record of continuous growth," said Mr. Garibaldi Boy Thohir, President Director of Adaro Energy.
The order will contribute beneficially to FLSmidth's earnings until the end of 2012.
Please address any questions regarding this announcement to Group Chief Executive Officer Jørgen Huno Rasmussen, FLSmidth & Co. A/S at +45 36 18 18 00.
For further information about FLSmidth, please visit www.flsmidth.com.
Pernille Friis Andersen
Corporate Communications & Investor Relations