Altura waits environmental permit to start coal production

Australia firm Altura Mining Ltd said on Monday that it is waiting for environmental permit from the government to start coal production in mid 2011 at its Tabalong project in South Kalimantan.

The mine has JORC resources of 11.3 million tons of high-quality thermal coal based on delineation over the last few years. The coal has a strip ratio of about 12:1, is low ash (<4%) low sulphur and high calorific value (>6,800 kcal/kg on as-received basis) thus would attract a strong price (>US$100/ton) in the current market, the company said in statement.

Altura is in the process of finalising transport arrangements to access markets, and is awaiting approval for the project to go ahead. It consists of two distinct licences (IUP?s). The mine is not located protected forest, hence no re-classification of land is required for approval. Some commercial forest operations about the tenement areas, and negotiations regarding access for transport are ongoing, it said.

Planned production at Tabalong is modest in scale, initially up to 500,000 tons per annum. The company is considering arrangements including mine-gate sales, contractor mining/trucking to a barge facility or on-barge sales.

The company is using a cash cost of US$59.5/t FOB, including $32/t for mining and processing, $17 for trucking/barging and $5/t for other site-based overheads. This excludes royalties, working capital, exploration and some overheads.

Altura anticipates project approvals to come in coming weeks, construction early 2011 and first exports in mid 2011. "We estimate the project will produce at a rate of 30Kt/month growing to above 40,000 tons per month within twelve months," he said. (denny)