DBS Bukit Asam (PTBA Buy PT 25,500): Signs major infrastructure contracts with the Chinese

Bukit Asam (PTBA), through its subsidiary Bukit Asam Transpacific Railway (BATR) signed engineering, procurement and construction and operations and maintenance contracts with China Group Ltd. worth US$4.8bn last month. The aforesaid Tanjung Enim - Lampung railway project will have a railway coal transport capacity of 25 mn tons, and provides 50% IRR for PTBA. BATR is a JV between PTBA (10%), Transpacific Railway Infrastructure (80%) – owned by Prajogo Pangestu from Barito Pacific – and China Railway Engineering Corp (10%).

Sales comment: The Chinese seem to be very active in making mining and infrastructure investments today.