Banpu may suspend East Kalimantan's coal mine expansion

Thai energy company Banpu Public Company Limited said Thursday it may suspend the further expansion of its Kitadin-Embalut mine in East Kalimantan due to technical difficulties caused by geo-technical conditions of the mining area.

?The initial conclusion from the feasibility study indicates that the return from the further expansion of Kitadin-Embalut mine has become less attractive after reassessment of its geo-technical conditions,? Banpu said in a statement to the Stock Exchange of Thailand.

Banpu said the geological uniqueness of Kitadin-Embalut occasionally caused destabilization of coal layers and mudslide, causing technical difficulties in the excavation process, especially during unfavorable weather condition.

Banpu operates the coal concession through its subsidiary PT Kitadin Corporation. Kitadin produced 2.29 million tons of coal last year.

Banpu also said that existing coal production at the mine would continue as planned.

Kitadin earlier decided to cancel plans to resettle the villagers now living in the area where it plans to expand its mining operation due to higher costs compared with potential revenues expected from the area. The area in question is believed to contain 72 million tons of coal deposit, according to Banpu. (robert)