Bumi raises bid for Herald to fend off Antam offer

Fri, 05/02/2008 1:33 PM,  The Jakarta Post 

Publicly listed mining company PT Bumi Resources gained Wednesday approval from shareholders to raise its bid for Australian mining firm Herald Resource Ltd. amid competition from rival PT Aneka Tambang (Antam).

Bumi president director Ari S. Hudaya told The Jakarta Post on Tuesday the approval was necessary for the company to compete with the A$2.50 per share bid made recently by Antam and partner Shenzhen Zhongjin Lingnan Nonfemat Co. of China.

"We need to win approval from shareholders so we can be flexible in determining our bidding price. For us, Antam's offer is deemed comparative," he said before a meeting at the presidential palace.

Bumi is planning to raise its offer to between A$2.62 and A$3.29 a share, up from its previous A$2.25 a share offer.

Bumi's latest offer is estimated to be worth a total of more than A$455 million.

The two rivals seek to control Herald's lucrative Dairi lead and zinc project in North Sumatra, in which Antam already has secured a 20 percent stake.

Herald holds an 80 percent share of mining rights in Dairi, as well as minority ownership of numerous gold mines in Indonesia.

Bumi is the country's biggest coal miner, with assets including Arutmin Indonesia in South Kalimantan and Kaltim Prima Coal (KPC) in East Kalimantan, making Bumi the world's largest producer and exporter of thermal coal.

Ari said Bumi was targeting a 16 percent increase in coal production this year to more than 60 million tons.

"We will spend between US$50 million and $60 million in capital expenditure to help raise our production," he said. -- JP/Rendi Akhmad Witular