Delta Dunia Group completes acquisition of Atlantic Carbon Group, Inc., a leading global producer of ultra-high-quality anthracite

• The transaction is being carried out through American Anthracite SPV I, LLC, a company controlled by BUMA International.
• This acquisition will increase the geographical and revenue diversification of the Delta Dunia Group, which is in line with its strategic growth objectives.
• ACG is a value-added acquisition that aims to increase the Group’s revenues and is supported by long-term contracts with key customers.
• The acquisition fosters cooperation between ACG, BUMA and other Group entities, improving safety and mining operations through shared experiences and best practices.

JAKARTA, INDONESIA – Media OutReach Newswire – July 1, 2024 –
PT Delta Dunia Makmur Tbk (Delta Dunia Group, IDX: DOID), through American Anthracite SPV I, LLC, an entity controlled by PT Bukit Makmur Internasional (International BUMA), completed the strategic acquisition of Atlantic Carbon Group, Inc. (ACG) for USD 122.4 million. This acquisition secures the ownership of four ultra-high quality manufacturers (UHG) anthracite mines in Pennsylvania (USA) and positions the Delta Dunia Group as a key player in the global UHG anthracite market, which is of key importance for production
low carbon steel (LC steel).

This agreement represents a significant milestone for the Group, expanding its business from a mining services provider to a global mine owner. The agreement diversifies the Group’s business into future-oriented commodities, enabling it to capitalise on opportunities in a key mining region. The acquisition of ACG also accelerates the Group’s strategy to diversify its geographic footprint and reduce its reliance on thermal coal in its revenue mix.

ACG is not only strategically significant, but also serves as a value-adding acquisition for the Group due to its valuation, leverage and earnings impact, while developing relationships with key customers and stakeholders. The addition of ACG is expected to generate $120-130 million in Group revenue per year over the period 2024-2028⁽¹⁾. Moreover, it significantly diversifies the revenue structure of the Delta Dunia Group, increasing revenues from non-thermal activities from 19% in 2023 to 28% in 2024, which is consistent with the Group’s strategic goals of reducing dependence on thermal coal.

Ronald Sutardja, President and Director of Delta Dunia Groupsaid, “We are proud to have successfully completed this acquisition, which represents a significant milestone in our strategic expansion and diversification efforts. The long life of ACG’s four active mines, sufficient to support more than 25 years of mining and capable of supporting production of up to 25 million tons of LC steel per year, combined with the strong market demand for UHG anthracite, positions us well for sustainable future growth. This acquisition enables ACG and BUMA’s operations in Indonesia and Australia, together with our neighboring businesses, to synergistically leverage their extensive experience, best practices and innovative approaches to safety, mining operations and management.”

BUMA has extensive experience in successfully integrating and growing its portfolio companies post-acquisition and expects to do the same with ACG. Leveraging its capabilities, BUMA has significantly expanded its global footprint from Indonesia with the acquisition of BUMA Australia in 2021. Since then, BUMA has not only consolidated its presence in one of the leading mining centers in the world, but also expanded its service portfolio to include metallurgical coal. This strategic expansion has resulted in a four-fold increase in BUMA Australia’s order book by 2022, significantly improving the Group’s operating performance.

Eric Martin, CEO of Atlantic Carbon Group, Inc., said: “These are exciting times for ACG as we take the company to the next level of safety, quality and production. ACG has consistently shown growth, supported by strong market demand and favorable prices for UHG anthracite. Being part of the Delta Dunia Group opens new paths for growth and innovation. With BUMA’s renowned expertise in seamless acquisition integration and operational excellence, we are poised to significantly increase our production capacity. We look forward to leveraging their extensive industry experience to unlock new potential and significantly advance our operational strategies.”

ACG, known for its strong market position, supported by strong anthracite demand and over 30 years of operational excellence, brings significant value to the Group. With 150 employees and an experienced management team, ACG has secured long-term contracts with industry leaders to support its growth.

Expansion into the United States allows the Group to meet the growing demand for UHG anthracite, necessary for the production of electric arc furnaces (EAF) and LC steel. U.S. anthracite exports increased 10.6% CAGR from FY2014 to FY2023⁽²⁾and arc furnaces are driving future expansions in steel production capacity in the U.S. and Europe. China, the world’s largest steel producer, has also outlined plans to increase arc furnace production to 15% of total steel production by 2025 and further increase that share to 20% by 2030. Governments in the U.K. and Germany are also promoting a shift from blast furnaces to arc furnaces, further boosting demand for high-quality ACG anthracite.

https://www.deltadunia.com

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