Limestone Proposal [PDF]

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LIMESTONE MINING INVESTMENT PROJECT PROPOSAL REMBANG, CENTRAL JAVA, INDONESIA



2021 PT. SINAR ENERGY PASIFIK



EXECUTIVE SUMMARY Project Company Commodity Location Investment Value Target Production Mining Lisence



: Limestone Mining : PT. Sinar Energy Pasifik Joint Operation with PT. Paserindo Pratama Sejahtera : Limestone and its derivative products : Tegaldowo Village, Kajar Village, sub-disrict Gunem, District Rembang, Province Central Java, Indonesia : ± USD 3,000,000,- ( Three Million United States Dollar) : Start From 30,000 – 200,000 MT per month (Run of Mine) : - Goverment Recommendation Letter No. 2908/215 Date 28 Dec 2015 - Autorization of Mining Permit Areas (WIUP) No. 543.1/3037/2016 Date 20 Apr 2016 - Mining Permits (IUP) Exploration No. 543.31/6577/2016 Date 10 June 2016 (exp in 2019)



PROBLEM



1. Local Community Disturbance is one of common problem face by mining industry everywhere. Even by developing the mine can create new communities and bring wealth to those already in existence, but it can also cause considerable disruption. And for some they may be poor recompens for the loss of existing live style and the damage to their environment (such aserosion, deforestation, loss of biodiversity, significant use of water resources, dammed rivers, wastewater disposal issues, contaminated land etc). If the local communities feel they are being unfairly treated or inadequately compensated, mining can lead to social tension and sometimes to violent conflict. 2. Health Issues. Mining the limestone, can carries out continuous air pollution which will cause health issues such as respiratory illnesses and asthma to not only the locals but also to our workers. this can bring such huge disadvantage to the company. 3. Changes in Government regulations about the national and international trading regulations, tax collections, environmental and nature issues, etc. 4. Lack of Fund. For Limestone mining operation to run smooth will need support from large amount of fund which we are currently lacking.



SOLUTION



1. PT. Paserindo Pratama Sejahtera and PT. Sinar Energy Pasifik anticipate social tension and violent conflict by embrace, socialization, and collaborations with the headman/ local influencer and or local goverment officials to educate local communities in all different categories involved that the benefits of mining to the community are substansial. Developing mining can impact significantly on the economy, the biggest and most positive impacts are the boost in jobs that absorb locals and this indirectly will contribute to level up the local income and wealth especially in these times while covid-19 pandemic beat down the economy. We also allocate some revenues as CSR Fund to the affected villages as dispensation and as social responsibilities to locals. By now we have had 100% of locals supporting consent letters stated that local community agree and fully support to our mine. On the other hand, our limestone mining location is about ± 20 KM from nearest village and specificly prepared for mining purpose by regional development plan from the goverment which we can say it is far enough to not directly affected the locals with nature damage and it is already approved by Indonesian goverment. Yet, we still pay full attentions to the waste and damage of the mining as Indonesia standart regulations and requirements. 2. In order to reduce the health issues caused by continuous air pollution at mining site, We will educate and set high standart of working safety regulations to our workers accordingly to international safety procedure standard. Health insurance will be provided to the site workers to guarantee their health and colaborate with locals health clinic which will also fulfilling one of Indonesia requirement of labor protection regulation. 3. Dealing with goverment regulation , we collaborate and maintain close relationship with not only local goverment yet with the central birocrations so that we can avoid direct contradiction before, during and after mining process. 4. Need to find investor.



MARKET ANALYSIS International Market •



• •



The International limestone market size was estimated at USD 73.02 billion in 2019 and is expected to drop down to USD 64.45 billion in 2020 and 2021 caused by Covid-19 pandemic Market demand in 2020 in 6,340.64 Million tons and still growing based on infrastuctural development and steel production in the world. The largest market secmen in the world is dominated by construction sectors such as cement, concrete and road base.



Industries affected by Limestone Production •



Building & Construction



•



Iron & Steel



•



Agricultural



•



Chemical



•



Others



Potential International Market a. North America o



The U.S.



o



Canada



o



Mexico



b. Europe o Germany o France o The U.K. c. Asia Pacific o China o Japan o India o Indonesia o Bangladesh o South Korea



d. Central & South America o Brazil e. Middle East & Africa



Regional Insights Asia Pacific was the largest regional market in 2019 with a revenue share of over 53.0% in 2019 and this trend is anticipated to continue over the forecast period. The region dominates the market on account of being the largest steel producer in the world and the growth of the construction sector in the developing economies of the region. The covid-19 pandemic has impacted the economic stability of the region, however, unlike other countries, the manufacturing operations and other activities are resuming at a faster pace in China, which is a positive sign for market growth. For instance, in April and May 2020, when the world witnessed the peak of covid-19 cases, China produced 177.3 million tons of crude steel in these couple of months, maintaining its top position.



The market in North America is anticipated to register a growth rate of 3.1%, in terms of revenue, over the forecast period on account of propelling construction activities, coupled with steel production in the region. The region is also a key producer of animal feed in the world, which is a vital application of limestone. The U.S. and Mexico are amongst the top 7 animal feed producing countries in the world. The outbreak of the covid-19 pandemic had compelled the world to completely suspend all manufacturing and other activities, construction being one of them. However, in the second half of 2020, the activities are slowly beginning to resume their



operations. For instance, in July 2020, plans were unveiled for the development of a new 322-unit housing project in New York, the U.S. The project is part of the state’s USD 1.4 billion initiative and is being built as a joint venture between Monadnock Development and CB Emmanuel Realty. Europe is a significant region of the market and is the second-largest steel producer in the world after Asia. The crude steel production in Europe was 298.5 million tons as of 2019, according to the World Steel Association. The steel industry is of key significance to the European economy as it supports nearly 2.6 million jobs and creates around Euro 140 billion (USD 160.3 billion) of gross value added, according to EUROFER. However, the covid-19 outbreak had a severe impact on the steel sector of the region, where the supply was reduced by 10% in the first quarter of 2020. A slump in manufacturing activity has immensely affected steel demand and production in the region, which is anticipated to impact the limestone demand for a couple of years. In summary, limestone investment are still very promising and profitable.



LOCAL MARKET BUYER LIST



No



Buyer Name



Volume/ Month 30,000 – 60,000 Ton



Grade/Spec



1



PT. Krakatau Steel & Posko, Cilegon



2



PT. BRTK, Sloke – Rembang



30,000 Ton



3



PT. OMYA, Rembang



10,000 Ton



4



PT. Pindo Deli, Kerawang PT. Charoen Pockphan



10,000 Ton



PT. Semen Indonesia, Rembang Tianjin Cement



5 6 7



Est. Price ( in USD ) 16.42 / Ton



Est. Cost ( In USD ) 11.78 / Ton



2,3, Waste Sizing



7.85 / Ton



5 / Ton



7.85 / Ton



3.57 / Ton



7.85 / Ton



3.57 / Ton



Cash at Site



8.92 / Ton



4.28 / Ton



Cash at Site



2,000 Ton



Grade 1 ROM Grade 1 ROM Grade 1,2,3 Mesh 20 Up Waste



FOB Cigading Jetty Stockpile Sloke, Rembang Cash at Site



2.14 / Ton



1.42 / Ton



Cash at Site



100,000 Ton UP



Grade 1,2,3 ROM



TBA



TBA



Based on Agreement



1,000 Ton



1,3 Mixed Sizing



Note



LIMESTONE POWDER LOCAL BUYER LIST* No



Buyer Name



1



Coal Minings For Reclamation Freeport Smelting at Gresik and Sulawesi Paint, Plastic, Tire and Steel Manufactures Milk and Cosmetic Manufacture



2



3



4



*Calcination and Mill Machine needed



Volume/ Month TBA



TBA



TBA



TBA



Grade/Spec Active Limestone Mesh 80-100 Active Limestone Mesh 80-100 Grade 1,2 Mesh 100 UP Grade 1 Mesh 80 UP



Est. Price ( in USD )



Est. Cost ( In USD ) TBA



TBA



TBA



TBA



Note



FUTURE PLAN



Mining and mineral trading



1st to 2nd year



3rd to 5th Year 6th Year onward



Purification Factory for building and construction



Cement factory



Active Limestone



Purification factory for foodgrade Limestone



Cosmetic and Food industry



COMPETITION Competitor in Indonesia mainly comes from predecessor limestone miners which already well established their company and supply through out Indonesia and abroad. For example there are 2 other miners around our location in Rembang. Name Tjiwi miners and Semen Indonesia. These will make us the new comer which will lead to some difficulties in penetrating the market. However we have confident we will make through since we already have our buyers and partners waiting for us.



OUR ADVANTAGE Our mining site have the highest quality of Limestone which can bring us wider segment in market. We not only able to supply to building and construction, and steel manufacture sectors, but we also able to penetrate agricultural and chemical sectors. We have a sign agreement with Tianjin Cement whom ready to build Cement Factory near our site whom had given their consent to our raw production output hence this will guarantee the production and supply will continue in a long time.



COST BUDGET PLAN



BUSINESS PROPOSAL



The amount of US$ 3 Million invested in this project will be invested in our company PT. Sinar Energy Pasifik and become our working capital to secure all the land in the mine concession and to expedite the process of taking control from the local mining company. Investor will be entitle with benefit of 51% of our PT. Sinar Energy Pasifik Shares. All profit made out of this project will be divided equally as per percentage of shares own.



DOCUMENTATION



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