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Created before Nov 2016
Last update: 2021-05-11 00:00:00 BankTrack
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|Sector||Coal Mining, Coal Electric Power Generation|
listed on Indonesia Stock Exchange
Adaro Energy's major share holders are Adaro Strategic Investment (43.91%) and Garibaldi Thohir (6.18%).
About Adaro Energy
Adaro Energy, established in 2004, is a large Indonesian coal mining company. It is a vertically integrated energy producer with businesses in coal, energy, utilities and supporting infrastructure. Adaro Energy consists of eight business units: Adaro Mining, Adaro Services, Adaro Logistics, Adaro Power, Adaro Land, Adaro Water, Adaro Capital and Adaro Foundation. Adaro also operates in Australia, where it owns the Kestrel coal mine. The company annually produces over 54 million tonnes of coal. The company is a major supplier to the global thermal coal market. Its coal is used throughout Europe, Asia, and the Americas.
Adaro Energy has an installed coal power capacity of 60 MW via its subsidiary MSW, 200 MW via joint venture TPI and plans, via joint venture BPI, 2,000 MW of coal power capacity in the Batang region of Indonesia.
Adaro operates the largest single-site coal mine in South Kalimantan under a Coal Cooperation Agreement with the Government of Indonesia. The company controls around 31,379 hectares of land, the equivalent of 58,640 football fields.
Why this profile?
Adaro's annual coal production of over 54 million tonnes makes the company responsible for the emissions of an estimated 108 million tonnes of CO2, thereby severely contributing to the adverse impacts of climate change.
Environmental and climate impacts
Climate impacts Adaro's annual production of coal exceeds 54 million tonnes. This makes the company responsible for the emittance of an estimated 108 million tonnes of CO2 into the earth's atmosphere.
Massive flood in South Kalimantan In January 2021, South Kalimantan was affected by massive flooding that killed at least 21 people and displaced more than 110,000 people away from their homes. According to LAPAN (National Institute of Aeronautics and Space of Indonesia), up to 200,000 hectares of area in South Kalimantan was flooded. Apart from the extreme rainfall, the floods have been linked with degraded land in the water catchment area. The mining operations have caused the loss of trees in the water catchment area. Trees are essential to retain water and prevent soil erosion that could result in heavy silting of rivers during rains.
Adaro operates the largest single-site coal mine in South Kalimantan and is one of the mining companies that has caused the degradation of the Barito River catchment. Nine areas were flooded around Adaro’s concession. The Indonesian National Police is currently considering opening an investigation into whether mining activities caused the massive flood.
Tax avoidance The 2019 Global Witness report, Taxing Times for Adaro, found that Adaro Energy’s use of subsidiaries in low-tax countries could have the effect of reducing the amount of tax paid in Indonesia. The report argues Adaro Energy’s use of its Singapore coal trading arm, Coaltrade Services International, may have allowed the company to pay USD 125 million less in tax between 2009 and 2017. The report argues a further USD 45 million could have been paid in Indonesian taxes if Adaro Energy didn’t operate subsidiaries in Malaysia and Mauritius.
Applicable norms and standards
Adaro subsidiary seeks up to US$ 58 million from IPO
PT Adaro Minerals Indonesia prospectus states it wants to raise up to 831.67 billion rupiah (US$ 57.83 million) through an IPO in December 2021 to cover the maintenance costs of its mining equipment. (The Jakarta Post)
Adaro signs USD 400 million loan agreement with consortium of 13 banks
On April 23, 2021, PT Adaro Indonesia, signed a Loan Facility Agreement in the amount of USD 400 million with several banks. The proceeds from this Loan Facility will be used to make early repayments of all Adaro Indonesia’s outstanding loans (Adaro press release).
2,000 MW coal power plant expected to be completed end of 2021
PT Adaro Energy expects the coal power plant (PLTU) in Batang, Central Java with a capacity of 2x1,000 mega watts (MW) to start operating by the end of 2021. Adaro's Managing Director Garibaldi Thohir admitted that there were a number of technical obstacles in the completion of the Batang PLTU project (CNBC Indonesia).
Adaro Energy in talks with Shenhua to develop coal-to-gas project
PT Adaro Energy is in talks with its partner Shenhua Overseas Development and Investment Ltd of China, to develop coal-to-gas and coal-to-liquid projects in Indonesia. Further information read here.
Adaro Energy to reach deal on two power plants
Major coal miner Adaro Energy is set to conclude deals for two power plant projects this year worth around USD 4.55 billion in total. Adaro Energy's legal director Syah Indra Aman said that his company would source syndicated loans to finance a 2x100 megawatt coal-fired power plant project in South Kalimantan (The Jakarta Post).
Between 2016 and 2018 23 financial institutions financed a total of USD 3.813 billion in corporate loans to Adaro Energy (Coalexit.org Database). See below for a specified overview.
In Nov 2019 PT Adaro Indonesia (a subsidiary of Adaro Energy) issued a USD 750 million bond, which was underwritten by BNY Mellon, DBC, Citi, UBS, MUFG and OCBC. See below for more details.
Adaro has a total of USD 2 billion loans maturing in 2021 and has started seeking lenders to refinance its debt. In April 2021, Adaro signed a five year loan agreement of USD 400 million with a consortium of 13 banks. See below for more details.