Borneo Lumbung to complete study on new coking coal block

Indonesia-listed coking coal producer PT Borneo Lumbung Energi & Metal Tbk expects to complete study within the next couple of months in new block named ?Telecon? in its coking coal mine unit PT Asmin Koalindo Tuhup (AKT), Central Kalimantan, the company?s director told Petromindo.Com.

?Currently, we conduct extensive drilling in our new block and then we will decide how to develop the block,? Ken Allan, marketing director of Borneo Lumbung said last week.

Initial resources estimation from Telecon block is around 100 million tonnes of coking coal, he said, adding at present, the company exploits its coking coal from block named ?Kohong?.

Currently the company has installed capacity of 5 million tonnes of coking coal per annum, which comes from Kohong block and it expects to double coal output, once the new block will come to onstream, he said.

He did not give exact timeline when the new block will start production, only said that the new block will come onstream within next few years.

According to the company?s prospectus in Oct 2010, AKT has proved and probable reserves of 69.2 million tonnes in Kohong block and resources of 378.8 million tonnes from two blocks, namely Kohong and Telakon. AKT?s current coal production comes from the Kohong block.

Borneo Lumbung also expects its production to increase by around 30 percent in to 4.6 million tonnes in 2012, from 3.5-3.6 million tonnes this year to meet demand from steel mills that are looking for diversifying their coking coal supply from Australia, the world?s top coking coal producer, said Allan. (denny)