black gold

black gold

Chairman's Statement

black gold

Extracted from Annual Report 2015

Business updates

The robust economic growth in Indonesia is one of the main contributing factors to the increase of domestic energy demand, especially in Sumatra where the demand for electricity is expected to grow by 11.0%1 annually. However, the growth of electricity generation is unable to keep pace with the rate of demand. In an effort to meet the electricity needs of this region, PT PLN is planning the construction of several new power plants in proximity to BlackGold's assets. The construction of these new power plants will potentially create demand for our coal in the future.

In line with the Government's effort to meet the domestic electrification demand, the Group has formed a consortium together with China Huadian Engineering Co., Ltd. ("CHEC") in December 2015, for an ongoing cooperation project for the development, construction, operation and maintenance of a coal-fired power plant in Riau province, Indonesia. This consortium will participate in a bid to produce and provide electric power to PT PLN, generating new streams of revenue for the Group. As PT Samantaka Batubara ("PT SB"), the Group's subsidiary, is the designated coal supplier in the agreement, the Group will also enjoy revenue from the sale of coal from its concession for delivery to the power plant.

Moving forward, we will also continue to grow our business by developing new projects, acquisitions and expansion into other markets. In addition to coal, the Group plans to diversify and explore business opportunities in sectors with good prospects for long term growth.

Commitment to excellence

At BlackGold, we believe that good corporate governance is crucial to our business integrity and is fundamental to our success. Not only does it strengthen internal and external relationships, it also builds trust with our stakeholders and promotes the long-term interests of our shareholders. The management has spent time in discussions to ensure that there is a strong, open, and effective governance system in place throughout the Group. This is best evidenced by our implementation of the Group's Code of Best Practices on Securities Transaction, Code of Ethics, and Whistleblowing Policy with which all of our employees are required to comply. Looking forward, we will continue to develop and maintain our high standard of corporate governance as it is crucial to the Group's continuing success.

The Group welcomed Mr Sudiarso Prasetio and Mr Johanes Budisutrisno Kotjo as consultants of the Group. With more than 60 years of combined experience in the mining and energy industries, both Mr Prasetio and Mr Kotjo bring to the group wealth of experiences from their successful careers. We also welcomed new personnel to our finance and accounting team, with the primary goal of maximizing shareholders value. We are confident that this addition will further improve efficiency in managing our operational costs and enhance our competitive position in the market. We are thrilled to have them as part of our team, and we are confident that they will help bring the Group to new heights in FY2016.

As part of our efforts to enhance investor relations, we have launched a re-designed company website. Our corporate website is an important channel for BlackGold's investor communications. The Group is committed to maintaining transparency in shareholder communications, and we aim to continuously provide our shareholders with accurate and up-to-date information relating to the Group.

Appreciation

On behalf of the Board of Directors of the Group, I would like to extend my deepest appreciation and thank all our business associates and employees for their dedication and hard work in helping the Company realize its many milestones during the year. As we look to the future, I am confident in the success of the Group as we have significant resources of high-quality coal and a solid, experienced workforce who have consistently demonstrated their abilities to operate effectively and efficiently. Together, let us look forward to the continued success of the Group.


Intekhab Khan

Independent Non-Executive Chairman
Source: 1RUPTL PLN 2016-2025, Ministry Energy and Mineral Resources
Republic of Indonesia