Bayan Resources, Amerod sign joint venture agreement

Australian mining technology developer Amerod Resources Limited announced on Tuesday it had signed a deal with PT Bayan Resources (BR) to set up a joint venture to build a coal briquetting plant in Indonesia using coal from BR's mine in East Kalimantan.

The deal also includes an agreement under which BR will acts as an offtaker of the plant's products worth US$100 million.

The deal followed the recent move by Amerod to buy White Energy Technology Limited's coal technology. Amerod would change its name into White Energy Limited after the acqusition.

BR has tried White's technology, which can processes relatively poor quality coal into higher quality, more environmentally friendly coal. Based on the trial, the technology could improve the energy content of the coal produced at BR's Tabang mine in East Kalimantan to 6,500 kilocalorie per kilogram from 4,200 kcal per kg.

White (the new name of Amerod) will have 51 percent of the joint venture, with BR holding the rest.

They will build build binderless coal briquetting plants using White?s technology to process coal from the Tabang mine.

?The parties (BR and White) are now completing a feasibility study and project plan as a precursor to commencing work,? Amerod said.

Initially, the joint venture will build a plant with production capacity of 1 million tons per annum. Once this plant has demonstrated proven capacity, a further 2 million tons per annum line will be added.

Besides, BR has agreed to purchase US$100 millon of upgraded coal produced from the coal briquetting plants over a 5 year period.

Tabang coal mine is operated by PT Fajar Sakti Utama. Meanwhile, BR holds the right to sell domestically coal output from the mine. (Robert)