BHP?s C. Kalimantan coal project to start trial production in 2013
Tuesday, October 4 2011 - 06:16 AM WIB
The source said that it expects to start construction phase next year and commercial operation will take place by 2016. ?At the present, the project is going well and everything on schedule,? source said without giving further details.
In July 2011, BHP announced that it is planning to carry out environmental impact assessment (EIA) on its Central Kalimantan coking coal project.
A joint announcement by the company?s unit PT Juloi Coal and Central Kalimantan regional governments said that the study will cover Juloi Coal concession of 95,600 hectares in Murung Raya regency.
In March 2011, BHP also announced the tender of the construction road from Port at Muara Tuhup to the proposed Haju mine. The expected award value of this Construction Contract is greater than US$20 million dollars.
BHP has 7 coal contract of work (CCoW) areas that form Maruwai Coal Project, which were awarded in 2000 but thus far has yet reached production stage due to logistical challenges and forestry problems. Undeveloped metallurgical and thermal Coal Resources are estimated at 774 million tonnes.
The project is located in the heart of Kalimantan island and is facing huge logistics problems as the distance to transshipment point is very far which made transportation costly. Infrastructure in the area is very poor, which will force the Company to develop its own.
The company is also facing regulation problems as some of the concession are located in protected forests where open pit mining is prohibited.
BHP Billiton has picked PT Adaro Energy as a partner with 25 per cent interest stake and BHP Billiton holds the remaining 75 percent to develop the project.
In Jan 2011, Indra Diannanjaya, President Director of BHP?s coal mining units in Indonesia told a parliamentary hearing that the Company would spend between $500-1 billion until 2014 to bring the project to become onstream in 2014. He said that the investment would be needed to bring the project into first phase production which would be planned to reach 6 million tonnes per annum of thermal and coking coal.
Another $2-3 billion would be needed to ramp up capacity to 11 MTPA and would reach ultimate capacity of 40 MTPA in 15 years, Indra said.(denny)