Delta Dunia completes acquisition of Atlantic Carbon | INSIDER

PT Delta Dunia Makmur, through American Anthracite SPV I, LLC, a controlled entity under PT Bukit Makmur Internasional (BUMA International), has completed the acquisition of Atlantic Carbon Group, Inc. (ACG) for US$122.4 million.

The move earns Delta Dunia Group ownership of four producing Ultra-High-Grade (UHG) anthracite mines in Pennsylvania (USA) and makes it a pivotal player in the global UHG anthracite market, crucial for the production of low-carbon steel (LC steel).

This deal expands the company’s operations from a mining service provider to global mine ownership. It diversifies the Group’s business into future-facing commodities, allowing it to seize opportunities in a key mining region. Acquiring ACG also accelerates the Group’s strategy to diversify its geographical presence and reduce its dependence on thermal coal in its revenue mix.

Atlantic Carbon Group not only holds strategic importance but also serves as a value-accretive acquisition for the Group due to its valuation, leverage, and earnings impact, while expanding relationships with key customers and stakeholders. The addition of ACG is projected to generate US$120 – 130 million in the Group’s revenue per year from 2024 to 2028 . Moreover, it significantly diversifies Delta Dunia Group’s revenue mix, increasing non-thermal revenue from 19 percent in FY 2023 to 28 percent in FY 2024, aligning with the Group’s strategic goals of reducing reliance on thermal coal.

Ronald Sutardja, President Director of Delta Dunia Group, said the acquisition marks a critical milestone in the company strategic expansion and diversification efforts. The long lifespan of ACG’s four active mines, sufficient to support over 25 years of mining and capable of supporting the production of up to 25 million tons of LC Steel annually, coupled with market strong market demand for UHG anthracite.

“The acquisition positions us well for sustained future growth. This acquisition enables ACG and BUMA’s operations in Indonesia and Australia, along with our adjacent businesses, to synergistically leverage their extensive experience, best practices, and innovative approaches in safety, mining operations, and management.” he said in a statement on Monday, July 1,2024.

BUMA has a strong track record of integrating and growing its portfolio companies’ post-acquisition and expect to do the same with ACG. Leveraging its capabilities, BUMA has significantly expanded its global footprint from Indonesia by acquiring BUMA Australia in 2021. Since then, BUMA has not only established a presence in one of the world’s premier mining hubs but also broadened its service portfolio to include metallurgical coal. This strategic expansion has resulted in a quadrupling of BUMA Australia’s order book by 2022, significantly enhancing the Group’s operational performance.

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

Expanding into the US allows the Group to meet the rising demand for UHG anthracite, essential for electric arc furnaces (EAFs) and LC steel production. US anthracite exports have grown at a 10.6 percent CAGR from FY 2014 to FY 2023 , with EAFs driving future steelmaking capacity expansions in the US and Europe.

China, the largest steel producer globally, has also put forward plans to increase EAF production to 15 percent of total steel production by 2025 and further increasing the proportion to 20 percent by 2030. Governments in the UK and Germany are also promoting the shift from blast furnaces to EAFs, further boosting demand for ACG’s high-quality anthracite.