PT Delta Dunia Makmur Tbk, through its controlled entity American Anthracite SPV I, LLC under PT Bukit Makmur Internasional (BUMA International), has successfully acquired Atlantic Carbon Group, Inc. (ACG) for $122.4 million. This acquisition secures ownership of four Ultra-High-Grade (UHG) anthracite mines in Pennsylvania, USA, positioning Delta Dunia Group as a significant player in the global UHG anthracite market, essential for the production of low-carbon steel (LC steel).
The acquisition marks a pivotal milestone for Delta Dunia Group, transitioning from a mining service provider to a global mine owner. This strategic move diversifies the Group’s business into future-facing commodities, enabling it to seize opportunities in a key mining region. Acquiring ACG also accelerates the Group’s strategy to diversify its geographical presence and reduce dependence on thermal coal.
ACG is a value-accretive acquisition for Delta Dunia Group, enhancing its valuation, leverage, and earnings while expanding relationships with key customers and stakeholders. The addition of ACG is projected to generate $120 – 130 million in revenue per year from 2024 to 2028. This acquisition will significantly diversify Delta Dunia Group’s revenue mix, increasing non-thermal revenue from 19% in FY2023 to 28% in FY2024, aligning with the Group’s strategic goals.
Ronald Sutardja, President Director of Delta Dunia Group, commented, “We are proud to have successfully completed this acquisition, marking a critical milestone in our strategic expansion and diversification efforts. The long lifespan of ACG’s four active mines, with over 25 years of mining potential and the capacity to support the production of up to 25 million tons of LC Steel annually, 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.”
BUMA has a strong track record of successfully integrating and growing its portfolio companies post-acquisition. Leveraging its capabilities, BUMA has significantly expanded its global footprint from Indonesia by acquiring BUMA Australia in 2021. Since then, BUMA has established a presence in one of the world’s premier mining hubs and broadened its service portfolio to include metallurgical coal. This strategic expansion resulted in a quadrupling of BUMA Australia’s order book by 2022, significantly enhancing the Group’s operational performance.
Eric Martin, Chief Executive Officer of Atlantic Carbon Group, Inc., stated, “These are exciting times at ACG as we elevate the company to the next level of safety, quality, and production. ACG has consistently demonstrated growth, supported by strong market demand and favourable UHG anthracite prices. Being part of Delta Dunia Group opens new avenues for growth and innovation. With BUMA’s renowned expertise in seamlessly integrating acquisitions and their operational excellence, we are poised to significantly enhance our production capacities.”
ACG, known for its robust market position backed by over 30 years of operational excellence, brings significant value to Delta Dunia 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 Delta Dunia Group to meet the rising demand for UHG anthracite, crucial for electric arc furnaces (EAFs) and LC steel production. US anthracite exports have grown at a 10.6% CAGR from FY2014 to FY2023, with EAFs driving future steelmaking capacity expansions in the US and Europe. China, the largest steel producer globally, plans to increase EAF production to 15% of total steel production by 2025, further rising to 20% by 2030. Governments in the UK and Germany are also promoting the shift from blast furnaces to EAFs, boosting demand for ACG’s high-quality anthracite.
