Thiess wins new KPC contract

The Jakarta Post, Jakarta

Engineering and construction firm PT Thiess Contractors Indonesia announced on Monday it has secured new mining contracts worth US$1.2 billion, including a contract with coal mining giant PT Kaltim Prima Coal (KPC).

The new contract comes after Anglo-Australia mining giant Rio Tinto and Anglo-American energy firm BP Plc completed the sale of KPC to local mining company PT Bumi Resources last week.

"This new long-term contract with KPC will increase our current operation at the mine to 12 million tons per annum, which will generate an additional $550 million in revenue for Thiess Indonesia over the next five years," Thiess managing director Roger Trundle said in a press release to The Jakarta Post.

Thiess Indonesia, a subsidiary of Leighton Holdings Ltd, has been providing services to KPC since 1989.

Trundle said Thiess had also negotiated a two-year agreement with KPC to assist them in increasing production from the current 18 million tons per annum to 23 million tons per annum. The agreement involves production planning, as well as management of plants and equipment, he said.

Leighton's financial arm, Leighton Financial International, will provide a $40 million loan to KPC. This amount is part of the $404 million loan from international lenders secured by Bumi for the acquisition of KPC.

Apart from the contract with KPC, Thiess also extended its contract with coal mining company PT Arutmin -- also owned by Bumi -- for the operation of its Senakin and Satui mines. The contract will add $650 million to Thiess Indonesia's work-in-hand over the next five years, Trundle said.