Bayan terminates coal upgrading JV
Thursday, February 23 2012 - 10:26 AM WIB
IDX-listed coal mining giant PT Bayan Resources reported on Thursday that it has sent formal letter on January 21, 2012 to terminate a coal upgrading JV with ASX-listed firm White Energy Company Limited (WEC) and its units Binderless Coal Briquetting Company Pty Limited (BCBS) and BCBC Singapore Pte. limited (BCBCS).
The company said it also has filed counterclaim against WEC and BCBS at Singapore court.
PT Kaltim Supacoal (KSC) is a JV company owned 51% by WEC and 49% by PT Bayan Resources Tbk . It was formed in 2006 to construct, commission and operate a 1 million tonne per annum coal upgrading plant at Bayan?s Tabang coal mine in East Kalimantan.
The plant had been on trial run when Bayan decided to quit the JV as it was able to sell its 4,200 kcal/kg coal at higher margin to the market than having them fed to the upgrading plant. The company also expressed concerns regarding material handling issue in particular the level of dust generated.
On December 27, 2011, White Energy?s wholly owned subsidiaries, BCBS and BCBCS commenced legal proceedings in the High Court of the Republic of Singapore against Bayan.
The issues in the legal proceedings include a claim by BCBCS against Bayan for damages for breach of the Joint Venture Deed between the KSC shareholders, including the obligation to supply coal to KSC and the obligation to provide funding to KSC.
Editing by David Mustakim