A subsidiary of PT Indika Energy Tbk (INDY), namely PT Kideco Jaya Agung (Kideco), has applied for a contract extension to the Ministry of Energy and Mineral Resources (ESDM).

Currently, the holder of the Coal Mining Concession Work Agreement (PKP2B), which will expire on March 13, 2023, is waiting for the results of the evaluation of the contract extension application.

"Kideco's contract will expire on March 13, 2023. Currently, Kideco has applied for an extension to the Ministry of Energy and Mineral Resources," INDY's Head of Corporate Communications, Ricky Fernando told Kontan.co.id, Thursday (22/12).

As is known, the Contract of Work (KK) and PKP2B are given a guarantee of extension to a Special Mining Business Permit (IUPK) as a Continuation of the Operation of the Agreement Contract after fulfilling the requirements.

This is contained in Article 169 A of the Mining Law (minerals and coal) which is currently in force, namely Law Number 3 of 2020.

Currently, the total area of the Kideco concession is 47,000 hectares (Ha) with an operational area of about 15 thousand Ha. It has not been found out, how much kideco land area after the contract extension will be.

"Currently, Kideco has applied for a contract extension where a review of the land area will be included," explained Ricky.

Arguably, Kideco has played an important role in sustaining INDY's performance in recent years. During January-September 2022, for example, the coal company whose shares are 91% owned by INDY (data September 30, 2022) contributed revenue of US$ 2.21 billion, equivalent to around 70% of INDY's consolidated revenue in the period which amounted to US$ 3.13 billion.

Understandably, in terms of operational performance, Kideco is indeed one of the main pillars of INDY's coal production performance, as is the case in 2022.

Just so you know, based on Kontan.co.id records, INDY is pursuing a coal production target of around 35.8 million tons. According to the plan, as many as 34 million tons of which will come from Kideco, while the remaining 1.8 million tons will come from PT Multi Tambangjaya Utama (MUTU).

In addition to applying for a contract extension, Kideco has also taken steps to carry out production activities next year. Ricky said, Kideco had submitted a Work Plan and Cost Budget (RKAB) to the Ministry of Energy and Mineral Resources.

"Kideco's production plan is still waiting for approval from the RKAB, but it is expected to be around 31 - 34 million tons," said Ricky.

A little information, the performance of Kideco's main top line and bottom line, namely INDY, is compact uphill in the first nine months of 2022.

INDY's interim financial report shows that INDY's consolidated revenue increased by 57.15% on an annual basis or year-on-year (YoY) from US$ 1.99 billion in January-September 2021 to US$ 3.13 billion in January-September 2022.

According to the climbing revenue, INDY managed to book a profit for the current period attributable to owners of the parent entity aka net profit of US$ 338.39 million in January-September 2022.

Previously, INDY posted a loss for the current period attributable to owners of the parent entity aka a net loss of US$ 5.95 million in January-September 2021.

Image source: ANTARA FOTO/Nova Wahyudi/nym

Source: https://industri.kontan.co.id/news/kideco-jaya-agung-kideco-ajukan-perpanjangan-kontrak-ke-kementerian-esdm