Churchill to start E. Kalimantan coal production in 2010

UK miner Churchill Mining PLC plans to commence coal production from its Kutai coal project in East Kalimantan in the second quarter of 2010 with initial production of 5-6 million tonnes per annum, a company official said on Tuesday.

Managing Director Paul G. Mazak told Petromindo.Com in an interview that production could be tripled within the next few years of production start.

He said the production start schedule could be achieved if all stages of pre-production could proceed smoothly.

The company is expected to complete defining JORC-compliant mining reserves of 100 million tonnes in the first quarter of 2009, followed by target to add 400 million tonnes to its reserves in the following years, he said.

He also added that the company is expected to complete feasibility study and financing for the project next year.

Kutai project has coal CV of 5,400 with sulphur and ash content of 0.1 percent and below 4 percent, respectively.

Mazak said Churchill would build 100-km haul road and stockpile with capacity of 1.5-2 million tonnes. The loading port would also be built to be able to serve capsize vessels, he said.

Churchill is currently negotiating with potential buyers from China, India and South Korea to offtake Kutai coal, he said. The company has also signed offtake agreement to supply coal to nearby power plant. (denny)