Indonesians handed over Dmitry Bosov's factory for scrap metal

The Alltech Group has closed its business in Indonesia. The constructed metallurgical plant was cut into scrap metal, the Russians were accused of stealing ore, destroying forests, destroying roads and illegally employing Kyrgyz people.
19.05.2020
Kompania
Origin source
Blackspace Group, founded in Jakarta by Dmitry Bosov and his disgraced ex-Sibanthracite partner Alexander Isaev in 2015, was immediately remembered by Indonesian journalists. And not only with the futuristic 450-meter office in the Noble House skyscraper - an analogue of the situation center of Vostokugol management company on Rublevka, from where the coal tycoon managed his deposits.

Blackspace's plans were breathtaking. Investors from the Land of the Red Bear announced that they have licenses for the extraction of coal and bauxite on the island of Borneo, manganese ore in the west of the island of Timor. On the island of Sulawesi, they pledged to build 60 ferronickel plants, and on Kalimantan, a 500-kilometer railway that connects coal mines with river and sea ports.

In May 2016, in Sochi, in talks with members of the Indonesian government, Isaev, Bosov and his last wife, Sibanthracit Group Commercial Director, Katerina Bosova, reported that Blackspace’s investment in Indonesia reached $ 250 million and could reach 2.5 over the next five years billion $. Then Blackspace announced plans to build a network of fish processing plants and freezers in ten provinces of this country.

In 2017, Blackspace Director Yosef Pascananda announced the imminent launch of two ferronickel plants in Kabaen and Morovali, as well as his intention to buy PT Indoferro nickel iron plant, build another metallurgical plant in Central Java and a 40 MW power plant. It would help nickel producers to abandon unprofitable diesel generators and reduce the cost of production - a sure way to Indonesia's world leadership in this segment of metallurgy.

In fact, as Dmitry Bosov admitted to Forbes in 2016, work at Blackspace was carried out in only two places - at coal mines in Central Kalimantan and at the construction of a nickel-ferro-plant in Kabaen. Bosov, Isaev and partners then invested more than $ 100 million of their own and borrowed funds in this plant. Blackspace planned to borrow another $ 1 billion from its projects from Asian investment funds.

A series of miscalculations and failures

But, as Ko found out, Bosov and Isaev did not succeed in taking a complex highly competitive market with constantly changing rules of the game. The low cost of nickel ore at the time Blackspace entered Indonesia was the result of its surplus in the domestic market due to an export ban. And the ban itself is the result of a temporary victory of local metallurgists in the war against the miners, which has been going on with varying success for many years.

In 2017, mine owners got the government to resume exporting, nickel ore went to China. When its domestic price rose and external demand for Indonesian ferronickel fell, banks stopped lending to local metallurgists. This led to the closure of 11 factories, including the first phase of the Blackspace PT SSU plant in Kabaen - cheap Chinese equipment bought by Bosov in anticipation of a quick turnaround was ineffective in the new conditions.

Director of the company Yosef Pascananda denied bankruptcy, arguing that the crisis is not terrible for Blackspace due to the presence of the company five of its own mines. However, in November 2018, the PT SSU was closed and 544 local workers were laid off. They were promised to open the plant six months later “after modernization,” but in 2019 it turned out that the PT SSU equipment was disassembled, cut into scrap metal and transported from the island by sea.

A scandal erupted during which the Kabaena politicians accused Bosov’s company of “laundering the money of the mafia.” According to them, if Blackspace imported equipment duty-free, she did not have the right to export it without permission from the authorities. Investors immediately recalled the island’s truck wrecks, the “crimes” of workers from Tajikistan and Ukraine brought to Kabaen, and expired workers' visas from Kyrgyzstan. And at the same time they suspected of illegal ore mining and destruction of forests.

Blackspace was a little better at first with coal. Borneo, pitted with mines, literally stands on coal, with markets just a stone's throw away from markets (Singapore, South Korea and Taiwan). The company began developing a quarry with a capacity of 70 million tons in 2016. But, like most of Bosov’s projects, it was designed for quick payback, and transport prevented from increasing volumes to the desired 10 million tons per year. Coal in Central Kalimantan is transported by dump trucks 100 km to the rivers and floated to the sea on barges. After rains, hundreds of cars get stuck on primers, barges and bulk carriers stand idle while they wait.

The situation on Borneo would be saved by the railway, and it has long been included in the list of national projects by the country's authorities. Moreover, its two branches should be built by Russian Railways. Dmitry Bosov also wanted to lay his branch to the marine coal terminal, but did not receive a land allotment, sources say "Ko". “Indonesia’s land market requires connections on all levels of government, they weren’t enough for Bosov,” one of them explained.

After the failures in Kabaen and Kalimantan, Blackspace investors decided not to risk it. Before bauxite, manganese and fish, it never came to that. “They still mined coal in West Java, in small volumes at a high cost, but in 2018 Blackspace died completely,” the source said. “The office in Jakarta was abandoned after the pay scandal.”

The company's website is currently unavailable, its phone at Noble House is down. Blackspace Development Director Dmitry Kuritsyn did not answer Ko's questions. The Business Council for Cooperation with Indonesia, headed by his father Mikhail Kuritsyn, also did not tell anything about the fate of the company.

Alltech says the group’s shareholders completely withdrew from Blackspace “at the beginning of 2019”. The departure from Indonesia coincided with the decision of Dmitry Bosov to sell the "Arctic Mountain Company", burdened with a criminal case and a fine of 600 million rubles. for illegal coal mining in Taimyr. Contact "Alexander Isaev" Co. failed.

In Indonesia, there were no ceremonies

The history of Blackspace is not only a monument to the adventurism of the late coal magnate, whose short business model, based on rapid growth on credit, did not survive the first long crisis in the history of the Russian Federation. This is another story that it is easier to sell Russian raw materials to Southeast Asia than to extract it locally. Sibanthracite, for which Southeast Asia became the main export destination, paid $ 100 million for this knowledge.

Meanwhile, many Russian companies faced difficulties in Indonesia. For the fourth year, the local daughter of Russian Railways cannot begin the construction of a railway with a coal port and a thermal power plant on Borneo: a $ 1.7 billion project got stuck in fruitless negotiations with local officials on the purchase of land. Moreover, the president’s support for the project does not prevent the governor of East Kalimantan from threatening the Russian ambassador with a contract break. Work on the Rosneft refinery in Tuban is barely underway. The plans of Zarubezhneft, Novatek and Rosatom are just being discussed. For a long time no one remembers the Roskosmos project on Biak Island.

The authorities of Indonesia do not stand on ceremony at all with foreign investors. Thus, a controlling stake in the Papua mine was taken away from the American mining giant Freeport in exchange for the right to continue working. But decades of anti-Soviet propaganda under Sukharto, fierce competition from the traditional partners of Indonesia, the raw material orientation of the Russian economy, chaos in foreign policy, which are simultaneously engaged in by the Ministry of Foreign Affairs, the AP and the Russian Export Center, play against the Russians. And poor knowledge of the specifics.

“If you want to get something there, you will have to hire a pioneer company that will scout everything and will justify the effectiveness of the daughter,” says Indonesian Sergey Vasiliev, who has worked in the country for a long time. - You will need an influential, honest and sober partner with great connections. And most importantly, you need to get the support of local, not just central authorities. ”

Before the epidemic, Indonesian authorities proposed that Russian investors make money by moving the capital from the ever-flooded Jakarta to Borneo, where a second Dubai is due to appear. Although Indonesia’s attempt to build a “second Singapore” on Batam ended in a humanitarian catastrophe, increased prostitution and the export of sand. But Dmitry Bosov, who, with a state of $ 1 billion and a mass of debts, took up the Severomuisk tunnel worth 250 billion rubles, would probably like the idea of ​​transferring the capital. Indeed, the points of rapid growth, in search of which he rushed around the world, investing either in Asian nickel or in California marijuana, are becoming less and less.

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