Albertus Weldison Nonto
Mining tycoon Samin Tan has beaten out the world’s largest diversified commodity trader Glencore for a slice of Aburizal Bakrie’s Bumi Plc pie.Indonesia has a new coal baron.
Borneo Lumbung Energy & Metal (BLEM) president director Samin Tan again demonstrated to the world his strategic relationship with the Bakrie & Brothers, announcing he would sign a sales and purchase agreement that gives him a 23.8% stake in London-listed diversified miner Bumi Plc.
Samin told GlobeAsia that he hoped his company would make big money in 2012 as a result of the deal, which is valued at $1 billion and funded by a five-year loan from Standard Chartered Bank.
The announcement made headlines and marks a new chapter for BLEM. It also confirms that the Bakrie family, especially Nirwan, and Samin are still close friends and have maintained their long-standing business relationship.
Samin in the past told GlobeAsia of his respect for the Bakrie family, describing them as leaders of some of Indonesia’s biggest businesses and with visions of becoming global players. He said his friendship with Nirwan began before the country was embroiled in the 1998 financial crisis and has only strengthened.
Looking back at his career, there must have come a critical point when he decided to make money, instead of counting it. An auditor for more than 15 years at Deloitte & Touche and KPMG, he gave up his career in accounting in 2002. He opened business advisory services company Renaissance Capital with Surjadinata Sumantri. Only two years later, with Renaissance already making money, Samin reshaped his business orientation to include investments, including buying and selling assets.
He came close to acquiring Aburizal Bakrie’s PT Kaltim Prima Coal and PT Arutmin Indonesia in 2006 but failed after a long delay closing the transaction. Soon after, he took control of PT Asmin Koalindo Tuhup in a deal valued at around $175 million.
BLEM, the only coking coal producer in Indonesia, is owned by Samin and Surjadinata through investment company Republik Energi & Metal. It had a capacity of more than three million tons in 2010 and anticipated churning out more than five million tons of hard coking coal by the end of 2011.
Samin believes BLEM’s production capacity will reach about 15 million tons annually during the next decade. It has total proven reserves of 69.2 million tons and wholly exports its goods to companies including Tata Steel and POSCO.
The group is currently exploring its 150,000-hectare coal concession in Papua, which will soon be exploited. “We are a debt-free company, with lots of cash, and in an acquisition-capable status,” Samin says.
Born into a simple family from Bengkalis, Sumatra, Samin registered as a student in his hometown but then dropped out. He has turned his life around to become one of the most successful investors of the last five years.
Independent market analyst Teguh Wijaya says Samin has the x factor. Samin, however, says the commodity business is just as easy as digging the coal from the ground. “The toughest job is dealing with people,” he says. GA