Queensland-based Cokal Limited will start construction on the company’s flagship Bumi Barito Mineral coal mine project in Indonesia by the end of this year after receiving an in-principal approval from the Indonesian Ministry of Forestry.
The project marks the company’s progression from exploration company to mine developer.
Cokal Chairman and CEO Peter Lynch said a key requirement for the project had been met with the Indonesian Ministry of Forestry approving an In-Principal Forestry Permit for areas required for the mine located in Central Kalimantan.
Mr Lynch said an initial area of approximately 1,242ha has been approved by the Forestry Department to enable the development of the port, haul road and the initial development of the mine site once the conditions of the In-Principal Forestry Permit are met.
“We are pleased that the final stage in forestry permitting is nearing completion,” Mr Lynch said.
“The effort of our team to achieve this milestone in the timeframe is testimony to the way in which Cokal has been able to work in a professional manner with stakeholders from all three levels of Government.
“We have the ability to expand the operation from the initial 2Mtpa up to potentially 6Mtpa of premium coking coal for future development and this considerably increases our confidence in the success of this exciting project.”
Mr Lynch said Cokal is aiming to start construction of the mine later this year with first production targeted in the second half of 2015. Cokal has already accepted a package of up to US$150 Million from financing group Platinum Partners to fund the project.
“In addition to providing written undertakings regarding the payment of relevant taxes and rehabilitation, Cokal will spend the next two to three months completing the pegging of the ‘Borrow and Use Forest Area’ and satisfying all the conditions required by the In-Principal Forestry Permit,” Mr Lynch said.
“The timing on this will mainly be driven by the boundary pegging which requires approximately 2,000 concrete boundary pegs to be put in place at the boundary of the initial 1,242ha Borrow and Use Forest Area.
“In parallel, Cokal will be finalising the Platinum loan documentation to enable final design and construction drawings for the project to be complete and long lead item orders to be placed. This parallel process has been the basis of the construction plan which will enable production in the second half of 2015.”
The BBM Coal Project is situated in Central Kalimantan, Indonesia in the prospective metallurgical Upper Barito Coal Basin, Regency of Murung Raya. The Project covers an area of 14,980ha. The Project is adjacent to the BHP Billiton’s, Indomet Coal, Joloi Project in Murung Raya Regency. BBM currently has a JORC Coal Resource of 261Million tonnes (Mt) in multiple seams comprised of 10.5Mt Measured, 13.5Mt Indicated and 237Mt Inferred Coal Resources.