Aussie?s OGL signs contract to mine deal in E. Kalimantan

Australia-listed firm Overseas & General Limited (OGL) said on Monday that its majority owned Indonesian joint venture company, PT OGL Indotrade Resources has entered into a Contract to Mine (Surat Perintah Kerja) with Indonesian local firm CV Rahmat Nikmat.

CV Rahmat has a coal mine at Samboja in Kutai Kartanegara regency, East Kalimantan.

OGL has committed to a small drilling and sampling program over the mine commencing in late May to better quantify the geometry, quantity and quality of coal, the company said in statement.

Geological mapping has identified a single seam of 4 meters in thickness dipping gently from the surface. Analysis of outcrops shows the coal to have a medium energy with low ash and sulphur contents.

The company said that the project will start production in July/August 2010, with initial production of around 50,000 tons per month of thermal coal.

An initial payment has been made to secure the contract, which will be deducted from royalties paid to the owner through the life of the project. No other payments are necessary, it added. (kanti)