Bumi says Dairi zinc-lead mine to start production in Q2 2011

Indonesia-listed mining giant PT Bumi Resources said that it has received greenlight from the government to develop its Dairi lead and zinc mine in North Sumatra, with production expected to commence in the second quarter of 2011.

?We?ve got a greenlight from government and expect to soon obtain the permit from a forestry ministry, which is faster than our initial target of the first quarter of next year,? Bumi?s senior vice president for investor relations Dileep Srivastava told reporters on Thursday.

In a statemnent released in November last year, Dileep said that Bumi needed to invest $211 million to develop Dairi project. He also said that the company would receive a permit for the utilization of protection forest in Dairi from the Ministry of Forestry by the end of 2009 and it expected to start production in 2012.

The Dairi concession has three fields, Anjing Hitam, Base Camp and Lae Jahe. The three fields own mineral reserves of about 16.4 million tons, 13.4 percent of which is proven zinz reserves, 7.8 proven black tin reserves.

Bumi took over Australia-listed Herald Resources's majority shares in PT Dairi Prima Mineral, the owner of the mine, through a hostile takeover in 2008.

The Australian company, together with its 20 percent partner PT Aneka Tambang Tbk, then planned to develop Dairi zinc/lead project to process 1 million tons of ore per annum and to produce between 220,000 and 100,000 tons of zinc and lead concentrates annually. (*)