Aussie?s OGL acquires E. Kalimantan coal mine

Australia-listed firm Overseas & General Limited (OGL) through its Indonesian majority owned subsidiary PT OGL Indotrade has secured the rights to the Jongkang Coal Mine near Tenggarong, Kutai Kartanegara regency in East Kalimantan,

?The lease is a 94-hectare IUP Exploitation with all permits in order for immediate mine operations. The acquisition cost is based on backend royalties for each tonne of coal sold, and a small initial cash payment. Additionally, the previous mining contractor has been compensated for land clearing, overburden removal and construction of the haul road linking the mine to the port,? the company said in statement.

Resource definition drilling has confirmed the presence of several shallow seams ranging in thickness from 1 to 1.5 meters. The gross calorific value (GCV) of 6,950 cal/kg (adb), 2% ash and 0.7% sulphur, it said.

Mine planning has been carried out at Jongkang to produce up to 25,000 tons per month open cut coal at a maximum strip ratio of 13:1.

OGL Indotrade has entered into a rental contract for supply of earthmoving equipment and will directly supervise mine operations. A 375 series bulldozer, two units of 500 series excavator on overburden removal, and two units of 320 series excavator for coal extraction, will arrive on site during the second week of August 2010 to recommence the mining operation. The previous mining contractor has been released from the site.

A 1.5 kilometre haul road connects the southern end of the mine to an existing 100,000-tonne stockpiling and handling facility on the Mahakam River.

Coal from the mine will be sized using a 500 tons per hour crushing plant, and loaded onto maximum 10,000 ton barges by an 800 tonne per hour conveyor barge loading system.

The crushing, stockpile and barge loading facilities already exist, and OGL Indotrade has negotiated a commercial fee for priority use. Barges will haul coal to either the Muara Jawa (14 hours) or Muara Berau (22 hours) anchorage ports for transhipment to Handymax vessels.

OGL is currently finalising a sales contract with a Chinese entity for sale of the product.

The Jongkang operation will supplement coal output from OGL?s Rahmat project, which is simultaneously being developed to produce at 50,000 tonnes per month. First production of Rahmat coal is expected for September 2010, it added.. (kanti)