Dear Shareholders,
As we have witnessed, 2014 was a tough year
for the coal industry in general. The intensive
investment in the previous years resulted in
a chronic oversupply of coal, while demand
from some of our export destinations, such as
China, turned weaker. The MMSCASIA Coal
Price
1
extended the fall in the previous years
and declined by a further 20% to US$71 per
tonne in 2014. As a response to the depressed
situation, governments around the world have
taken steps to cap coal output. For the first
time in at least 30 years, coal production in
Indonesia decreased on an annual basis
2
,
compared to a CAGR of 13.9% for the 2003-
2013 period. The market conditions cast
shadow on the entire sector, and Geo Energy
was not spared.
Key developments during the year
With our strategy to diversify the business
model and revenue streams, the Group made
several strategic moves during the year. In July,
we entered into a mining services contract
and mining cooperation agreement with CV.
Mandiri Makmur Citra Tambang to provide
mining services in the concession located in
South Kalimantan, spanning a total area of 190
hectares. The agreement granted us the offtake
right to no less than 1.9 million tonnes of coal
with calorific value of 4,200 GAR.
In August, we completed the acquisition of SDJ
concession also in South Kalimantan, spanning
a total area of approximately 235 hectares.
The acquisition increased our coal reserves
from approximately 11 million tonnes to more
than 50 million tonnes. As the calorific value
CHAIRMAN’S
MESSAGE
1
IHS McCloskey cif Asia Steam Coal Marker Price,
source: Bloomberg
2
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coal-exports-idUSL3N0TE31G20141124
