BHP Billiton closes deal to extend S. Kalimantan coal minelife

BHP Kendilo, South Kalimantan coal mining unit of global resource giant BHP Billiton had reached deal with local coal mining firm PT. Indocoal Pratama where the latter will supply 1 to 1.2 million tons of raw coal annually to the formter, and thereby extending BHP Kendilo?s minelife, a government official said Thursday.

?Both companies had agreed on the terms, and first production from Indocoal will commence this week,? Wimpy S. Tjetjep, Director General of Geology and Mineral Resources.

This news corrected earlier story that said BHP Kendilo is in negotiation with S. Kalimantan unit of Thai?s Banpu PLC to supply raw coal to BHP.

Another government official said the coal will be transported through 4-kilometers road from Indocoal?s mine to BHP?s washing plant.

BHP Kendilo originally scheduled to close its mine this year due to reserve depletion, but with the deal, it may extend minelife for some more years.

Indocoal is a local company holding coal concession near BHP?s mine. It has nothing to do with Indocoal group controlled by Banpu.

BHP Kendilo, which has production capacity of 750,000 tons per annum, is the only coalmine in production controlled by BHP Billiton after it sold entire stake in Arutmin Indonesia to Bumi Resources. (alex/godang).