Information about “Dairi mining”dont believe what people say.remember about freeport?people says only copper mine?But its more than copper ..contain Gold.and thousand more if you really want to know.you should go to school.

Profile

In 1998, Herald made a rich new zinc/lead discovery at Dairi in North Sumatra and is currently in the final throes of completing a bankable feasibility study (BFS) on this project. The project ownership is 80% Herald, 20% PT Aneka Tambang (major listed Indonesian mining company, partly state- owned). The Dairi Project comprises a large area (about 25,000 Ha) with title held under the reliable Indonesian Contract of Work system. There are many different styles of mineralisation present, and a number of different prospects have been identified within the Dairi project area. To date, most work has concentrated in the Anjing HItam area, where a reserve of 6.3m/t of 16% zinc, 10% lead (23% Zinc equivalent) has been delineated. Infill drilling on the Anjing Hitam reserve has been undertaken as part of the BFS process, and this is likely to upgrade the reserve further. Herald is looking at a mining and milling rate of around 1m/t per annum, i.e an initial mine life of 6-7 years. However as Herald said in a recent presentation, the endowment of this area is so rich that we would be surprised if we were not still producing there in 20, 30 or 40 years time. Prior to our entry, the district was completely unrecognised as the major zinc/lead camp that it clearly is. Additional resources of 9m/t of lower grade material also exist at Lae Jehe and Basecamp just north of the proposed processing facilities area, and represent the most obvious sources of future ore supply once the reserves at Anjing Hitam have been

Location, Regional Geology, Sopokomil Dome Geology

Sopokomil Resources

 

Zone

Resource Category

Tonnes

(millions)

Zinc

(%)

Lead

(%)

Zinc Equiv.

(%)

Silver

(g/t)

Anjing Hitam JSZ

Measured & Indicated

7.1

16.6

10.2

22.4

13

Anjing Hitam JSZ

Inferred

0.9

9.8

5.6

12.9

10

Basecamp JSZ

Inferred

0.8

7.2

4.3

9.6

5

Lae Jehe JSZ

Inferred

8.2

7.7

4.1

9.9

6

 

JMVT

Inferred

7.3

3.1

0.3

3.3

9

JVT

Inferred

0.9

1.0

1.7

2.3

75

 

 

Dairi Prima to invest $180m

Jakarta, February 20, 2008 (The-Jakarta Post) -Despite unresolved permit problems, PT Dairi Prima Mineral, a local unit of Aus­tralian-based zinc and lead producer Herald Resources, said Tuesday it planned to spend US$180 million for initial exploration activities at its North Sumatra mine.

 Dairi office manager Junjungan Harahap told The Jakarta Post the company had so far spent $50 million to develop infrastructure and road access.
 
The company has two concession areas — Anjing Hitam and Laezahe — with a combined reserve of 14 million tons of lead and zinc.
 
Junjungan estimates that with such reserves the exploitation period will last 15 years. He also said he hoped the company would be soon able to secure all required permits from the government to carry out the mining activities, which are located in forestry areas.
 
Dairi is 80 percent owned by Herald and 20 percent owned by state mining company PT Aneka Tambang (Antam).
 
Herald has been in the spotlight recently over a buy-out offer from Antam and PT Bumi Resources, the country’s largest coal producer.
 

Dairi costs reduce
 

HERALD Resources has reduced the capital costs of its Dairi zinc-lead project in Indonesia by $US18 million following a decision to scrap a pipeline to transport the concentrates in favour of trucks

Herald shareholders to decide Antam, Bumi takeover battle

Novia D. Rulistia ,  The Jakarta Post ,  Jakarta   |  Mon, 06/30/2008 10:50 AM  |  Business

The management of Australian mining firm Herald Resources, which has been the target of acquisition by Indonesian mining giants PT Aneka Tambang (Antam) and PT Bumi Resources, will let shareholders choose between the two competing offers.

Antam, the country’s second largest nickel miner, and Bumi, the country’s largest coal producer, have been competing for months to control Herald, the 80 percent owner of Dairi lead and zinc mine in Indonesia.

Herald finds both offers “identical” from a financial standpoint and feels no need to recommend either of the two, said Heralds’ chairman Terrence Allen in a statement over the weekend.

“Given that the Herald Board believes it is in the best interests of shareholders and the company that this takeover process is concluded as soon as possible, we believe shareholders should accept one of the 2.8 million (Australian) dollar offers, in the absence of a superior proposal,” he said.

“From an economic point of view, we see no advantage in either offer over the other for Herald shareholders and hence we do not propose to make a single offer recommendation.”

The statement came after Bumi, through its multipurpose company Calipso Investment Ltd., also provided unconditional terms for securing stakes in Herald’s Dairi mine in North Sumatra, matching Antam’s earlier offer.

The two companies have now both offered $2.8 million (US$2.68 million) for Herald’s stake in the mine, with unconditional terms. Antam will close its offer on July 1 while Bumi closes on July 3.

Herald’s shares closed at $2.91 at the Australian Securities Exchange on Friday.

Bumi’s investor relations spokesperson Dileep Srivastava said the offered price was the best option for its shareholders and nearly matched that of the market.

Meanwhile Antam’s newly-appointed president director Alwin Syah Loebis said although Herald’s share price was good value, Antam would not buy its shares too high as they were feared to be inefficient.

Antam has partnered with China’s Shenzen Zhongjin Lingnan Nonfermet Co. Ltd. to make its offer for Herald. Antam and Shenzen already own a combined 19.29 percent stake i

SYDNEY, Jan 7 (Reuters) – Indonesia’s PT Bumi BUMI.JK, said on Monday it may employ up to $375 million in debt supplied by Credit Suisse to help fund a A$455 million ($395 million) hostile takeover of Australia-listed Herald Resources Ltd (HER.AX: Quote, Profile, Research)

Bumi, the second largest company listed on the Jakarta bourse, said in documents filed in Australia, that it will guarantee the debt, which it expected to be provided by Credit Suisse in Singapore to Bumi subsidiary Calipso Investment.

Bumi said Credit Suisse was “highly confident” of arranging the debt.

Herald, which has advised its shareholders not to take any action yet, in late December said it had received approaches from a number of parties since Bumi launched its A$2.25 a share offer on Dec. 12.

Herald’s main asset is its 80 percent interest in the undeveloped Dairi lead and zinc mine in Indonesia, which is awaiting a forestry permit before construction work can start. Indonesian state-controlled nickel producer PT Aneka Tambang Tbk ANTM.JK holds the other 20 percent of Dairi.

Bumi, part of Indonesia’s politically well-connected Bakrie group, has interests in mining, plantations and telecoms.

Bumi said it did not expect instability in the credit markets would hinder its ability to raise debt. ($1=A1.15) (Reporting by James Regan)

 

 

 

 

 

HER (Herald Resources) – mining exploration company focused on the Dairi base metals project in Indonesia. Appears that full development of the Dairi project everything hinges on the forresty approval by the Indonesian Government. This decision is expected to be released by Xmas.

Currently trading around $1.65 mark, however Euroz has a $3.00 target should forresty approval be granted. Perilya have just taken a sizable 8.9% stake in the company in early November, thus speculation of a potential takeover bid is not of the question.

Appears to offer large upside should this approval be granted.

Anyone know much about HER?? or how the Indonesian govt operates when it comes to giving the green light for forresty approvals??

Cheers

Attched below is the Euroz Report –

http://www.herald.net.au/files/resea…rces%20Ltd.pdf

 

 

 

Antam and Zhongjin Announce A Joint A$504.8 Million Recommended Cash Offer For Herald Resources

Jakarta, January 30, 2008 (ANTARA) – PT Antam Tbk (“Antam”) and Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. (“Zhongjin”) today announced a joint cash offer of A$2.50 per share for the entire issued capital of Herald Resources Limited (“Herald Resources”), valuing Herald Resources at A$504.8 million (US$448.1 million) (“Antam / Zhongjin Offer”).

The Board of Herald Resources withdraws their previous recommendation to accept the lower offer of AUD$2.25 per share of Calipso Investment Pte Ltd (“Calipso Offer”) and unanimously recommends that Herald Resources shareholders accept the Antam / Zhongjin Offer in the absence of a superior proposal.

The Directors of Herald Resources have also indicated that in the absence of a superior proposal they currently intend to accept the Antam / Zhongjin Offer for their own holdings of Herald Resources shares.

Antam is a state-controlled Indonesian mining group that already holds a 20% interest in Herald Resource’s 80%-owned Dairi zinc/lead project in Northern Sumatra, Indonesia.

Zhongjin is a zinc/lead mining and smelting company based in the People’s Republic of China (“China”) and operates the low cost Fankou mine.

The Antam-Zhongjin Offer is A$0.25 per share (over 11%) higher than the Calipso Offer of A$2.25 per share and represents a premium of A$0.236 over the volume weighted average of all Herald Resources shares traded since the announcement of the Calipso Offer.

The Antam-Zhongjin Offer is subject to a number of conditions, including 50.1% minimum acceptance, Foreign Investment Review Board approval and Antam and Zhongjin obtaining necessary shareholder and regulatory approvals. The conditions are outlined in full in Appendix 1 to this announcement.

The President Director of Antam, Dedi Aditya Sumanagara, said: “The joint acquisition of Herald Resources represents an opportunity for Antam to have a majority interest in the Dairi Project and build a strategic partnership with one of China’s leading zinc and lead companies”.

“In view of the recently launched offer for Herald Resources, we believe that the value of the Dairi Project can be best optimised by the expertise of Antam and the introduction of an operating partner, such as Zhongjin, which has demonstrated expertise in zinc and lead mining and the capacity to enter into long-term production off-take arrangements. These factors have enabled us to offer an amount in excess of the valuation range of A$2.03 – A$2.39 per share derived by PT Zodiac Perintis Penilai, the independent valuer commissioned by Calipso’s parent, PT BUMI Resources Tbk.”

The President of Zhongjin, Zhang Shuijian, said: “We believe that Zhongjin and Antam have the potential to add significantly to the current value of the Dairi Project”.

“Zhongjin looks forward to working alongside Antam in developing the Dairi Project and building a long and prosperous relationship”.

The Chairman of Herald Resources, Terrence Allen commented that: “We believe that the Antam / Zhongjin Offer represents an excellent outcome for Herald’s shareholders and we will be working with Antam and Zhongjin to ensure that this offer is put to shareholders as expediently as possible”.

The Antam / Zhongjin Offer will be made by way of an off-market takeover bid under the Australian Corporations Act 2001 through a Special Purpose Vehicle (“SPV”) that will be owned by Antam and Zhongjin in the proportions of 40% and 60%, respectively. In the event that the SPV is successful in acquiring 100% of the entire issued capital of Herald Resources, Antam and Zhongjin will hold combined direct and indirect interests in the Dairi Project of 52% and 48%, respectively.

Antam and Zhongjin intend to fund the Antam / Zhongjin Offer through a combination of cash and new and existing debt facilities.

Herald Resources has entered into a Deed of Undertaking with Antam and Zhongjin in relation to the Antam / Zhongjin Offer. This includes a break-fee of A$5 million payable to Antam and Zhongjin in certain circumstances, including a successful competing takeover proposal.

In addition, Antam has today purchased a total of 21.2 million shares in Herald Resources representing a 10.7% interest in the shares currently on issue.

Further information on Herald Resources, Antam and Zhongjin can be found at the following sources.

Company Overview Website
Herald Resources Appendix 2 http://www.herald.net.au
Antam Appendix 3 http://www.antam.com
Zhongjin Appendix 4 http://www.nonfemet.com

Euroz Securities Limited is acting as financial adviser to Herald Resources and Blakiston & Crabb is acting as its legal adviser.

Macquarie Capital Advisers is acting as sole financial adviser to Antam and Zhongjin and Blake Dawson is acting as their Australian legal adviser.

For further information please contact:

Antam
Public Relations Investor Relations
Bimo Satriyo (Corporate Secretary) Tel: +62 811 151 840 Email: Bimo.Satriyo@antam.com Cameron Tough Tel: +62 818 657 128 Email: cameron@antam.com

Herald Resources Financial Adviser to Antam and Zhongjin- Macquarie Capital Advisers
Mr. Michael Wright Executive Director Tel: + 61 8 9322 2788 Mr. Martin Alciaturi Division Director Tel: + 61 8 9224 0625

 

 

 

 

 

13 mining sites get forest status changed

Published Date: 06-11-2003
Type: Statement

13 mining sites get forest status changed

Source: Miningindo.com

November 06, 2003

Despite reports in the Indonesian media to the contrary recently, the Coordinating Ministry for Economics confirmed in Jakarta Wednesday (November 5) that the government will soon issue a presidential decree (Kepres) changing the status of forest lands in 13 contracts of works from protected to non-protected forest to allow mining development and production activities to resume.

Nearly 5 years after the implementation of Forestry Law No 41/1999 that banned open cut mining operations on land classified as protected forest.

Reports in the Kompas daily Wednesday indicate the government decided to allow 13 of the 22 to proceed after legal advice that it could be sued for up to US$31 billion for its decision to allow the Forestry Law in 1999 to effectively and retrospectively extinguish approved Contracts of Work hedl by foreign companies to develop and mine mineral and coal resources.

Last year the Ministry of Energy and Mineral Resources proposed that 22 mining companies be allowed to resume their operations. The 13 mining companies awarded business permits by a limited coordination meeting have determined a viable mineral resource within their contracts of work (COW).

This decision will be discussed in cabinet meeting headed by President Megawati Soekarnoputri planned for Thursday (November 6). “The plan was this meeting held on Thursday. This decision will be delivered once more to the House of Representative (DPR). Soon after the DPR approval, the decree will be issued,” said a member of the Department Energy and Mineral Resources legal team in Jakarta on Tuesday (November 4) as quoted from Bisnis Indonesia daily.

Actually all technical ministers, Minister of Energy and Mineral Resource, Minister of Internal Affairs, Minister for the Accelerated Development of East Indonesia, and the Minister of Environment, along with the coordinating Minister for Economics have agreed to the proposal for 22 mining companies to be granted permits to resume activities.

There was an objection from a key institution, the Department of Forestry, because the 22 companies kept changing their name reflecting new partnerships and investors over the recent years.

Meanwhile, Bisnis Indonesia reported that the Minister for Coordination of the Economy, Dorodjatun Kuntjoro-Jakti is scheduled to report to President Megawati Thursday regarding the decision on the issue of overlapping regulations concerning the use of protected forestlands. Only 115,118 hectares from a total 6,054,175 hectares of protected forest surrounding the mining areas will undergo a change of status.

A copy of the official decision of the Limited Coordination Meeting obtained by Bisnis Indonesia confirmed the approval of 22 mining companies, (13 were approved and 9 are continued) selected to continue their activities within protected forest zones and outlined the procedure to ratify the decision. The meeting also agreed to the mechanism and process of resolving the overlapping regulations as first proposed in a meeting on 18 July 2003.

The agreement will be delivered to the President through the Minister for Coordination of Economics to obtain an instruction for approval from the parliamentary House of Representative (DPR) Commission VIII and III before the Presidential Decree is issued.

An integrated inter-departmental team established to study the submissions by mining companies and the DEMR to resume operations delivered its report, and the criteria used for selection of mining companies recommended for approval.

Mining companies must meet the following criteria if their applications to resume operations and change the status of forestland use within their COWs are:

+The company has conducted exploration programs
+The company has delineated an economic mineral (or coal) resource and defined the plant or processing area required
+The company must have determined the investment or capital cost of the operation
+The company must contribute and provide benefits to local communities and regional development
+The company must have the support of the regional government.

The limited coordination meeting decision was that the 13 companies prioritized for approval are: PT Freeport Indonesia, PT Karimun Granit, PT Inco Tbk, PT Indominco Mandiri, PT Antam Tbk (Buli-Malut), PT Natarang Mining, PT Nusa Halmahera Minerals, PT Pelsart Tambang Kencana, PT Interex Sacra Raya, PT Weda Bay Nickel, PT Gag Nikel, PT Sorikmas Mining, and PT Antam Tbk (Bh Bulu Sultra).

The other nine companies considered to have good potential to continue their activities are: PT Newmont Nusa Tenggara, PT Sungai Kencana, PT Irja Eastern Mining, PT Kalimantan Surya Kencana, PT Nabire Bakti Mining, PT Dairi Prima Mineral, PT Newmont Horas Nauli, PT Maruwai Coal, and PT Sumbawa Timur Mining.****

 

 Herald Resources Ltd., of Australia, announced the discovery of significant lead and zinc resources in the Dairi area, Bukit Barisan Highland; the exploration concentrated in the Anjing Hitam area, in the southeastern part of the Sopokomil/Bongkaras domal structure, and it was estimated that the deposit contained an indicated resource of 7.5 million tons of lead and zinc at 10.3% lead, 16.7% zinc, and 14 grams per ton of silver and an inferred resource of 2.5 million tons at 6.8% lead and 11.3% zinc. Despite some reserves, no manganese was mined in 1999 and 2000.

Concerns about political uncertainties continued to deter foreign investment, creating an inhospitable environment for investment and operations. Expansion plans were on hold until the economic climate improved. In 1999, the Indonesian parliament passed two laws, to be implemented in 2001—on regional political autonomy and fiscal decentralization—whose impact on investment rules and procedures remained unclear. Mining companies were confused about the connection between the two laws on general mining. The major problem was contradictions between the centralistic 1967 law on mining, and the decentralistic law of 1999. In 2001, the 1967 law would no longer have legal strength to protect mining operations, particularly on new investments. Also, another 1999 law, on forestry, prohibited open-cast mining, which would protect forests in 68% of the area of Irian Jaya potentially available for mining exploration; 58%, in Sumatra; 50%, in Maluku; and 39%, in Sulawesi. Many mining companies postponed their expansion and new investment projects until the government could provide legal protection that was clear and unequivocal. In 2000, mining companies that operated under contracts of work (COWs) spent $550 million, which was half the amount expended in 1999. In 2000, 30 mining contactors, 14 producing, and 16 exploration companies postponed their investment programs, and 18 COWs were terminated. MEMR and related departments drafted a new mining law/regulation to replace the 1967 law with an updated regulatory framework that recognized the changing role of government, especially with regard to implementation of regional autonomy and fiscal decentralization and further safeguard of the natural environment.

Indonesia’s constitution places all natural resources in the soil and waters under the jurisdiction of the state. In 1999, the government increased taxes and royalties that created a less competitive investment environment. Restructuring and privatization of state-owned industries has been very slow, and new investment was still low. As the world’s fourth most populous country, Indonesia could become one of the largest steel-consuming countries. However, its volatile political situation and uncertain economic climate hampered development. The state-owned general mining company, PT Aneka Tambang, has gone public on the Jakarta Stock Exchange.

 

The following table indicates zinc projects that are currently in development, as well as mines that are expected to be restarted in the near future: 

New Mines Start Production Zinc

tpa

Lead

tpa

Capex Source
Lanping, China Late 2005?? 140,000      
Dairi, Indonesia Late 2006/07 90,000 50,000 US$118M Brook Hunt  Nov 2005
Jaguar, Australia Early 2007 25,000     Brook Hunt Nov 2005
Duck Pond, NFLD Canada Late 2006 34,500     Macquarie
San Cristobal, Bolivia Early 2007? 182,500 85,000 US600M Apex silver
Duddar, Pakistan Late 2007 100,000     Macquarie
Cerro Lindo, Peru Mid 2007 140,000 20,000   Brook Hunt Nov 2005
Perkoa, Burkina Faso Late 2007 60,000   $US72.5 Mining News, Dec 2005
Wolverine, Canada Q3 2007 44,000 4,000    
Aljustrel, Portugal 2007? 78,000 18,000   Brook Hunt Nov 2005
Subtotal 2006 and 2007   754,000 177,000    
Development  Projects          
Mehdiabad, Iran 2010 450,000 110,000   Brook Hunt Nov 2005
Penasequito, Mexico Mid 2008 75,000 40,000   Brook Hunt Nov 2005
Khandiza,Uzbekistan 2008? 45,000 17,000   Brook Hunt Nov 2005
Expansions, Restarts, Reductions          
Endeavor, AustraliaCBH Resources Mine failure Oct 2005 and restart 85,000? 52,000?   Brook Hunt Nov 2005
Balmat, USA Mid 2006 35 mths to ramp up to 54,000   $20M Brook Hunt Nov 2005
Lennard Shelf, Australia 18 mths after restart decision 180,000     TeckCominco Jan 2006
Sa Dena Hess, Canada 9 to 24 mths after a decision 40,000     TeckCominco Jan 2006
Antamina, Peru   Est.120,000 vs

184,000 in 2005

    TeckCominco Jan 2006
Langlois, Canada Mid 2007 54,000     Brook Hunt Nov 2005
Black Mountain-Deeps expansion, Namibia 2005 Increase from 28,200 to 45,000      

 
 Antam Battles Bumi for Control of Zinc, Lead Mine (Update5)

By Naila Firdausi and Madelene Pearson

Jan. 30 (Bloomberg) — PT Aneka Tambang and a Chinese partner offered A$505 million ($449 million) in cash for Herald Resources Ltd., topping a bid by Indonesia’s largest mining company to gain control of a lead and zinc project.

Antam, as the nickel mining company is known, and zinc producer Shenzhen Zhongjin Lingnan Nonfemet Co. offered A$2.50 a share, Perth-based Herald said in a statement. The stock closed above the price, signaling some investors expect a higher proposal. PT Bumi Resources had bid A$2.25.

Herald waited two years for approval for the $192 million Dairi mine. A joint bid by Antam, majority-owned by Indonesia’s government, and Zhongjin Lingnan may ensure the project goes ahead to meet rising metals demand from China.

“It would be easier for Antam to get all the necessary licenses than Bumi, considering” it’s owned by the government, Freddy Hendradjaja, who helps manage $581 million at PT Danareksa Investment Management including Antam stock, said in Jakarta. “Chinese companies are trying to find sources in other countries as demand grows and supply is strapped.”

Herald rose 8 cents, or 3.2 percent, to A$2.58 on the Australian Stock Exchange at the 4:10 p.m. Sydney time close. Antam shares jumped 11 percent to close at 3,600 rupiah in Jakarta. Bumi, also the country’s largest coal producer, fell 3 percent to 6,400 rupiah.

Antam is Indonesia’s second-largest nickel mining company by market value, and Zhongjin Lingnan is China’s fourth-biggest zinc producer.

Antam Diversifying

Herald’s board unanimously recommends the joint bid in the absence of a higher offer, the company said in the statement to the Australian exchange.

Jakarta-based Antam wants to reduce its reliance on nickel, which contributed 88 percent of sales in the nine months to Sept. 30. The company last year signed a $1.5 billion accord with United Co. Rusal, the world’s biggest aluminum producer, to build an alumina plant, and has said it wants to buy gold mines.

Bumi made its hostile offer last month after talks with Herald over a six-month period faltered. A successful bid would be the second-largest Indonesian takeover of a foreign company.

“We are watching and waiting for full details,” said Dileep Srivastava, head of investor relations at Bumi. “We continue to retain our interest in Herald and are happy to hold about 20 percent at a discounted price.”

China Demand

China is the world’s largest consumer of zinc, used to galvanize steel, and lead, used in car batteries. Lead has climbed 65 percent in the past 12 months in London as consumption outstrips production, while zinc has dropped 30 percent because of increasing global stockpiles.

“This is the first time Zhongjin Lingnan has looked to expand overseas,” said Ren Yunhe, a Shanghai-based analyst at Shenyin Wanguo Securities Co. “The acquisition target looks attractive according to the reserve prospects provided in the statement.”

Dairi, located in North Sumatra, is forecast to produce 220,000 metric tons of zinc concentrate and 100,000 tons of lead concentrate a year.

Antam, which owns 20 percent of Dairi, and Zhongjin Lingnan will fund the offer through cash and debt, the statement said. The bid is subject to a number of conditions and includes a break-fee of A$5 million payable to Antam and Zhongjin Lingnan.

Euroz Securities Ltd. is the financial adviser to Herald and Blakiston & Crabb is acting as legal adviser. Antam and Zhongjin are being advised by Macquarie Capital Advisers, while Blake Dawson is acting as their Australian legal adviser.

To contact the reporters on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Naila Firdausi in Jakarta at nfirdausi@bloomberg.net.

Last Updated: January 30, 2008 05:10 EST

More from Dairi …(International Annax Ventures’ zinc-lead mine)(Brief Article)

International Annax Ventures Inc. has received further assay results from its continuing drilling programme at the Sopokomil zinc-lead property in northern Sumatra, Indonesia. The drilling targeted the Anjing Hitam prospect (43D) and the Bongkaras area (45D), with the following results:

Hole IntervalZn Pb (m) (%) (%) 43D 381.5-390.3 13.2 7.7 45D 99.0-104.5 14.5 8.5Anjing Hitam is a stratiform …

Bumi Resources, the biggest coal producer in Indonesia, offered 455 million Australian dollars, or $397 million, for Herald Resources, and will seek to end a two-year deadlock over the company’s planned zinc and lead mine in Sumatra.

Bumi will pay 2.25 dollars a share for Herald, Bumi said in a statement Tuesday. Bumi made the hostile offer after talks with Herald faltered, a Bumi director, Kenneth Farrell, said Wednesday.

Indonesia is seeking to keep more of its resources in local hands after prices for commodities including oil, zinc and copper soared in the past five years. A successful bid would be the second-largest Indonesian takeover of a foreign company. Herald has been waiting for government approval of the $192 million Dairi zinc and lead underground mine for two years.

Dairi “is one of the world’s best undeveloped zinc deposits,” Peter Arden, an analyst at Ord Minnett in Melbourne, said. “It would be a really big prize for a local group.”

The biggest Indonesian foreign acquisition came in October when Berlian Laju Tanker, the largest shipping company in the nation by market value, agreed to pay $850 million to buy Chembulk Tankers, based in the Marshall Islands.

Bumi, whose shares have surged almost sevenfold this year to make it the second-biggest company in Indonesia by market value, is also seeking to expand its coal production, gold, copper and iron ore businesses.

“Bumi’s experience in the Indonesian mining sector and the requirements of the Indonesian regulatory process make it uniquely positioned to advance” the Dairi project, Bumi’s chairman, Ari Hudaya, said in the statement.

Newmont Mining, the second-biggest gold producer in the world, and Sumitomo Metal Mining are being forced to cut their combined 80 percent stake in the $4.65 billion Batu Hijau gold mine in Indonesia.

Australian zinc and lead producer Perilya bought an 8.9 percent stake in Herald last month and may seek to accumulate a strategic stake, Macquarie said in a Nov. 20 report.

Perilya’s chief executive officer, Len Jubber, could not be reached for comment.

It is unlikely a rival offer from Perilya or others would be forthcoming given it i’s an Indonesian asset and the other bidder is “the largest Indonesian mining company,” Farrell said.

“We did note the Perilya position, we haven’t spoken to them and at this point in time we perceive them as a shareholder of significance,” Farrell said. “But only a shareholder of significance, nothing more than that.”

Dairi, 20 percent owned by Aneka Tambang, is scheduled to produce 220,000 metric tons of zinc concentrate and 100,000 tons of lead concentrate a year. Construction costs may rise 15 percent from the initial $192 million estimate because of plant design changes and delays in obtaining approvals, Herald said last month.

“Bumi anticipates there will be a need for significant additional capital before first production,” Farrell said. “We are prepared to make that investment.”

The offer is conditional upon the construction cost of the mine not rising above $230 million, Bumi said in the statement. Bumi will go ahead with the acquisition if it receives acceptances of at least 50.1 percent, gains the approval of the Foreign Investment Review Board in Australia and as long as the price of zinc does not fall below $2,000 a ton for three or more consecutive days of trading.

“It should have been in production three or four years ago,” Ord Minnett’s Arden said. “Where they were going wrong is that they just didn’t have enough local horsepower.”

Zinc for three-month delivery fell $30 to $2,400 on the London Metal Exchange as of 1:37 p.m. Sydney time. The metal, which has declined 45 percent in the past year, last traded below $2,000 for three consecutive days in January 2006.

Credit Suisse is providing financial advice to Bumi for the offer and Mallesons Stephen Jacques is Bumi’s Australian legal adviser.

Herald’s executive director, Michael Wright, could not be reached for comment.

Aneka Tambang’s corporate secretary, Bimo Budi Satriyo, also could not be reached

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