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A fruitful investment

Article - April 4, 2012
The new and rapidly developing Apple Coal company (Indonesia) has proven to be a robust presence in the region, distinguished by its unfaltering commitment to the support and development of the domestic economy - and being a much welcomed boon to the prosperity of the native Indonesian workforce
NISCHAL JAIN, PRESIDENT COMMISSIONER OF APPLE COAL
Apple Coal, a wholly owned subsidiary of Apple Commodities Ltd., Hong Kong, has interests in coal mining, coal mine development, and coal trading, in the Indonesian provinces of Southeast Sumatra and East Kalimantan.

Its focus and strength lies, primarily, in the growing Asian energy markets. Through a combination of its asset strength and its close bonds – made through strategic and mutually beneficial local partnerships – it has experienced steady growth since its establishment in 2009.

Nischal Jain, President Commissioner of Apple Coal, has been pleasantly surprised by the short-term gains made by the company in addition to what he sees as its long-term potential: “Apple Commodities (Hong Kong) is also involved in agricultural products and textiles, as well as focusing on natural resources such as coal. We plan to expand our portfolio here in Indonesia, too. We are already looking into bauxite and manganese markets in the coming years. But right now it is just iron ore and coal for us.”

“Long-term plans include giving the land back to society through public parks and hospitals and schools for the local villages where we will be mining. We plan to replant the forests as well and go even beyond what the regulations stipulate. We are an environmentally responsible company.”

Nischal Jain, President Commissioner of Apple Coal

However, he is keen to stress that mining will not be the primary focus, ongoing: “PT Apple Coal is a subsidiary of Apple Commodities Ltd., which owns concessions all over Indonesia. Apple Coal is a trading company; we have been trading a lot of coal over the past three years and we will continue to do so, but as I have stated, Apple Coal is not just a mining company, nor are we thinking about staying as just a mining company.”

Over the next four years the company's aim is to become a 10 million metric ton per annum (mtpa) operation. In possession of several mines throughout Indonesia with an area totaling over 58,000 hectares, Mr. Jain is cautiously optimistic that they will become a publicly traded company, sooner rather than later. And that bright future looks quite attainable judging by the current growth rate.

Apple is also looking at investing over $350 million in the mining and infrastructure sector in over the next three to five years. Mr. Jain continues: “On the human resources side, we employ over 100 people in Indonesia, we have only nine ex-pats. Manpower is available in Indonesia and the expertise is here. We know how the system works here... we plan to employ close to 350 people in the medium term. Long-term plans include giving the land back to society through public parks and hospitals and schools for the local villages where we will be mining. We plan to replant the forests as well and go even beyond what the regulations stipulate. We are an environmentally responsible company.”

There are villages surrounding many of the sites in Indonesia and as they are located in remote areas, they aren't quite fecund in social resources. Mr. Jain explains Apple's position regarding this situation: “We plan to do whatever we can for those communities. Even now, Apple Coal supports many children and elderly people's initiatives in East Kalimantan. We provide for their education, their medicines, clean sanitation, and clothing.” And on a happier note, “We also try to get involved in celebrating traditional festivals with these isolated people.”

At present, Indonesia gets most of its investment in the mining sector, however it needs more investment in energy and mine mouth power plants. Despite the fact that Indonesia has so many resources, particularly gas, oil and coal, there are still critical electricity issues. There is not enough power. As Mr. Jain explains, “Jakarta is completely different to other areas of Indonesia. Sometimes even the major airports in Indonesia experience blackouts. That is why we need investment in the energy sector.

Over the latter part of the last decade business laws have changed, or been reformed, in Indonesia. These revisions have made it more straightforward for foreign companies to come and invest in the burgeoning economy. It may take time and effort for the energy deficit to be tackled in Indonesia, but in the meantime there is much opportunity for foreign investors as this country's growth prospects continue to improve.

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