SINGAPORE (June 27): Indonesia-based coal producer Geo Energy Resources has signed a new offtake agreement with Trafigura for its PT Sungai Danau Jaya (SDJ) mine.
Under the new offtake expected to start from Jan 1 2020, Trafigura, one of the largest physical commodities trading groups in the world, will buy and Geo Coal will sell the entire SDJ coal production for the remaining life of mine after fulfilling its domestic market obligations.
Geo Energy has committed to a minimum annual supply of 5 million metric tonnes of coal to Trafigura from the SDJ mine during 2020 to 2022.
Trafigura will also make available to Geo Coal a prepayment of US$15 million ($20.3 million) for the new offtake.
The new deal was signed after SDJ mine’s previous offtaker, Engelhart CTP (Singapore) (ECTP), and the group agreed to terminate their existing offtake agreement due to ECTP streamlining its physical coal trading activities and will be exiting its offtake agreements, including with Geo Coal.
Geo Energy says the new offtake comes with more competitive terms and better rates than the current coal purchase contract with ECTP.
The coal sales for the remainder of 2019 including the group’s domestic market obligations will also be marketed by SDJ.
Trafigura sources, stores, transports and delivers a range of raw materials to its clients around the world. The group has managed to grow its revenue from US$12 billion in 2003 to US$180.7 billion in 2018.
Shares in Geo Energy closed at 0.1 cent higher at 15 cents on Thursday.
