Agritrade: S. Kalimantan coal mine begins production
Wednesday, August 10 2016 - 04:20 AM WIB
Hong Kong-listed Agritrade Resources Ltd said that production and commercial operation of the Merge Mine in South Kalimantan have commenced since the second quarter of 2016 with initial sale transactions of coal happened in June.
The company said in a recent statement since the quality of the coal products from the Merge Mine is higher than that of average Indonesian thermal coal, the group intends to export the coal to power generators located in Asia such as Japan, South Korea, China and Taiwan, countries which may pay a premium for a constant supply of high CV thermal coal.
?It is expected that the Merge Mine would contribute to the turnover, profitability and positive cash flows of the group from FY 2017 onwards,? Agritrade said in the statement.
The company said it will further develop and invest in the production and operation of the Merge Mine in accordance to the established business plan and budget, with gradual ramp-up to the annual production target of 6 million tons per year.
The company acquired a quality coal mine, namely the Rantau Nangka underground coal mine (the Merge Mine) located in South Kalimantan Province through the acquisition of 51 percent interest in Merge Mining Holding Limited (MMHL) in December 2015. This acquisition is consistent with the company?s strategy and commitment to the Indonesian coal market. The Merge Mine has significant JORC compliant proved and probable coal reserves of 92.0 million tons and is expected to produce run-of-mine coal with low inherent moisture, low sulphur content and high CV of approximately 6,426 kcal/kg on air-dried basis, which is similar in quality to benchmark Newcastle coal of 6,300 kcal/kg.
The company said the acquisition of the Merge Mine, the only large-scale mechanized longwall underground coal mine in Indonesia, has enabled the group to tap into the underground coal mining opportunities present in Indonesia. The fully retreating mechanized longwall mining is a proven and accepted mining method and the average life-of-mine operating cost is expected to be lower. The longwall operations also allow the group to economically extract high CV coal with low inherent moisture and sulphur from typical Indonesian coal.
Editing by Reiner Simanjuntak