Delta Dunia completes acquisition of Atlantic Carbon Group

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 important but also serves as a value-adding acquisition for the Group in terms of valuation, leverage and earnings impact, while expanding relationships with key customers and stakeholders. The addition of ACG is expected to generate USD 120-130 million of Group revenue per year from 2024 to 2028. It also significantly diversifies Delta Dunia Group’s revenue mix, increasing non-thermal revenue from 19% in FY2023 to 28% in FY2024, which is in line with the Group’s strategic objectives of reducing its dependence on thermal coal.

Ronald Sutardja, President and CEO of Delta Dunia Group, said:

“We are proud to have successfully completed this acquisition, which represents a key milestone in our strategic expansion and diversification efforts. The long operational lives of ACG’s four active mines, with more than 25 years of mining and the capacity to produce up to 25 million tonnes of LC steel per year, combined with the strong market demand for UHG anthracite, position us well for sustainable growth in the future. This acquisition enables ACG and BUMA’s operations in Indonesia and Australia, together with our affiliated businesses, to synergistically leverage their extensive experience, best practices and innovative approaches to safety, mining operations and management.”

BUMA has a proven track record of successfully integrating and growing portfolio companies post-acquisition and expects to do the same with ACG. Building on this capability, BUMA has significantly expanded its global footprint from Indonesia with the acquisition of BUMA Australia in 2021. Since then, BUMA has not only established a presence in one of the world’s leading mining hubs, but has also expanded its services portfolio to include metallurgical coal. This strategic expansion has resulted in BUMA Australia’s order book quadrupling by 2022, significantly improving the Group’s operational efficiency.

Eric Martin, CEO of Atlantic Carbon Group, Inc., said:

“These are exciting times for ACG as we take the company to the next level in safety, quality and production. ACG has consistently demonstrated growth, supported by strong market demand and favourable UHG anthracite prices. Being part of the Delta Dunia Group opens up new avenues for growth and innovation. With BUMA’s recognised expertise in seamless acquisition integration and their 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 drive significant advances in 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.

The expansion into the US market enables the Group to meet the growing demand for UHG anthracite, which is essential for the production of electric arc furnaces (EAF) and LC steel. Anthracite exports from the US increased by 10.6% CAGR from FY14 to FY23, and EAF will be a driver for future steel capacity expansions in the US and Europe. China, the world’s largest steel producer, has also outlined plans to increase EAF production to 15% of total steel production by 2025 and further increase this share to 20% by 2030. Governments in the UK and Germany are also promoting a shift from blast furnaces to EAF, which is further driving demand for high-quality ACG anthracite.