PT Bumi Resources, Indonesia’s largest coal producer, may begin mining lead and zinc at Dairi in North Sumatra within two years should it gain final approval by the end of 2009.
“We are hoping that we can get the forestry permit by the end of this year,” Dileep Srivastava, head of Bumi’s investor relations, said yesterday in an interview in Singapore. “Once that happens we can fast track the roll-out” so production can begin in 20-24 months, he said.
Bumi wants to add lead, zinc, copper, gold, oil and gas production to become Indonesia’s largest mining company, Srivastava said. It bought the Dairi deposit when it took an 84.2 percent stake in Sydney-based Herald Resources Ltd in July last year with a A$563 million ($508 million) bid.
Jakarta-based Bumi, which paid A$2.85 a share in the first bid, is seeking to buy the remainder of the company with a new offer that’s currently worth 93 cents a share. Its stake rose to 88.1 percent, according to a filing today.
Bumi shares have tripled this year to 2,725 rupiah, out- performing the Jakarta Composite Index, which has gained 83 percent this year. Herald shares have jumped almost sevenfold this year to 92 cents when last traded on October 7, giving it a market value of A$186 million.
In July last year, Herald estimated Dairi had an ore size of 11.3 million metric tonnes, containing 10.5 percent zinc and 5.7 percent lead. Herald halted building of roads and a port in January because of delays in getting government approval to operate in the forested area.