BHP Kendilo ceases operations

Global resource company BHP Biliton ceased coal operations at its Kendilo mine in East Kalimantan after coal-supply agreement with a local company ends this month.

In an effort to extend mine life which should have ended last year due to reserves depletion, BHP Kendilo signed one-year contract with Indo Coal Pratama, in which the latter supplied around 1 million tons of raw coal to be processed at the former?s washing plant, which was located around 4 kilometers from Indo Coal?s mine.

BHP Indonesia president Andrew Wilson said on Tuesday the agreement was not extended.

Wilson said BHP was also trying to get similar deal with another concession holder near Kendilo?s mine, but failed.

BHP Kendilo, is the only Indonesian coalmine in production controlled by BHP Billiton after it sold entire stake in Arutmin Indonesia to Bumi Resources.

According top Wilson, there are still remaining reserves left at Kendilo mine, but would require joint venture with PT.Kideco Jaya Agung as the reserves are located near Kideco?s facilities. Wilson did not disclose whether there has been any talk with Kideco over the matter. (alex)