BHP starts mining at Indomet project, expects coal rebound
Tuesday, September 8 2015 - 02:28 AM WIB
BHP's Indonesian coal boss, Mark Small, was quoted by Canberratimes.com.au as saying Tuesday that mining had this year started at Haju in Central Kalimantan, which is the first coal deposit mined in the IndoMet coal project, a joint venture which is 75 per cent owned by BHP and 25 per cent by IDX-listed PT Adaro Energy Tbk.
He also said the company would look to start its next Indonesian mine within two years.
"In parallel we have commenced construction within a second CCoW (Coal Contracts of Work) due to come on-stream in 2017," he said.
BHP's strategy is to mine only the world's largest mineral resources which can be expanded for generations or even centuries and therefore it rarely goes into a new mining province without evidence of a substantial resource.
"To date we have identified a resource of 1.3 billion tons with further exploration planned," Small told Ozmine Jakarta, a forum organized by Austrade.
Coal prices have dived as part of a global commodity slump but Small said that, beyond the challenging short-term outlook, he was optimistic about both thermal coal and metallurgical coal in the medium to long term. "We are potentially more bullish about metallurgical coal," he said.
"In the long term I think there will be a recovery, to what extent I am not sure."
He said there was an opportunity in Indonesia to "consolidate, get the cost base right and establish a sustainable business going forward".
One of the benefits of Indonesia was that it had a relatively low wage structure but there were also potential improvements in productivity factors, he said.
Small said there was a lot of opportunity in Indonesia and it was possible to operate with the same standards as you would in Australia or another developed economy.
"Indonesia is certainly a place of opportunity. I would just reinforce finding a suitable partner who is aligned with your own values and standards."(*)