Churchill says may not be affected by coal export restriction plan
Saturday, January 22 2011 - 01:22 AM WIB
?Churchill and its Indonesian Advisory Board is in active discussions with the appropriate Indonesian authorities to clarify any such policies and will update the market when appropriate.? The company said .
?As previously announced, Churchill is working closely with the PLN, the Indonesian State Power Provider, and expects that all its obligations to supply the domestic market will be met via this relationship.
From discussion with the relevant authorities, Churchill believes that any export restrictions will not apply to all producers and expects that further details may clarify that any export restrictions may not apply to Churchill because of the coal supply arrangement in place with the PLN,? the company said.
Churchill?s shares fell 8 percent on Friday, apparently triggered by press speculation about the government?s possible plans to introduce export restrictions on certain grades of coal.
On Thursday, reports surfaced that Indonesia is preparing to place a ban on the export of low quality coal with an energy value of below 5,600 kilocalories per kilogram. The government wants producers to upgrade the coal to a higher energy value product in an effort to increase the country?s export revenue.
Churchill is planning to bring its East Kutai Coal Project, which has JORC resource of 2.73 billion tonnes into production with designed capacity of 30 million tonnes per year.
Churchill has hired Credit Suisse to find a ?big brother with deep pockets? to fund the development of the mine, which has a net present value of US$1.8 billion.
Churchill is keeping all of its options open and is still looking at possibly running East Kutai as a stand-alone project funded by equity and debt.(alex)