Jakarta. Coal mining company Delta Dunia Makmur (DOID) has finalized a major acquisition deal in the United States. Through its subsidiary, American Anthracite SPV I LLC, DOID has signed a stock purchase agreement (SPA) to acquire Atlantic Carbon Group Inc (ACG), the second-largest producer of UHG anthracite in the US.

The transaction, valued at $122.4 million (Rp 2 trillion), is expected to be completed by June 2024, pending regulatory approvals and other customary closing conditions. Upon completion, DOID will gain ownership of ACG's four UHG anthracite mines located in Pennsylvania.

In acquiring ACG, DOID gains control over its operations, crucial for low-carbon steel production, reducing carbon emissions by up to 74 percent. With ample reserves, DOID foresees a significant boost, aiming for a 25 million-ton annual low carbon (LC) Steel production capacity.

"This transaction marks a significant milestone for the group. Upon completion, we will achieve several strategic objectives. The group will become the owner of mines crucial for LC Steel production. We will expand our geographical footprint into other key mining areas," said Ronald Sutardja, CEO of Delta Dunia Group, in his statement on Wednesday.

Furthermore, according to him, the agreement further diversifies DOID's income towards its ESG target to reduce thermal coal revenue to below 50 percent of the company's total revenue by 2028.

Expanding into the US allows the DOID Group to capitalize on the increased demand for UHG anthracite, used in Electric Arc Furnace (EAF) production. Over the past decade, US anthracite exports have grown at a combined annual growth rate (CAGR) of 10.6 percent from 2014 to 2023.

All projections for steel production capacity expansion in the US and Europe are aimed at EAFs, and UHG anthracite from the US will be a crucial supply source for EAFs globally. Additionally, governments in several key jurisdictions, particularly the UK and Germany, are encouraging the conversion from blast furnace to EAF.

ACG's operational activities are expected to add revenue of $120-130 million per year. These projections are also an addition to DOID Group's revenue guidance for 2024, previously released based on existing operational activities.