Coal Fe: Q1 coal sales jumps 80% from previous quarter
Monday, May 5 2014 - 02:45 AM WIB
ASX-listed Coal Fe said that total coal sales volume from its joint venture coal project in Kuta Kartanegara Regency, East Kalimantan during the first quarter of this year reached 65,771 metric tons, or an 80 percent jumped from the fourth quarter of last year thanks to favorable weather condition.
However, the company said in its quarterly report published last week that if compared to the same Janary-March period of last year, the first quarter 2014 sales performance was lower due to the lingering bearish coal market condition.
Coal Fe and Indonesian firm PT Toba Jaya entered in 2009 a joint venture and mine management agreement, under which Coal Fe will receive royalty worth US$1 per ton of coal sold.
The company said that the coal was sold free on board (FOB) on barge at the Abadi private jetty.
?Coal prices have remained range bound at the trough of the coal price cycle over the last 12 months. The local situation is further compounded by escalations in fuel price and wages. The management of the Company and PT. Toba Jaya are reviewing the operations and monitoring the market situation closely and may adjust the production accordingly when necessary,? Coal Fe said in the quarterly report.
The PT Pancaran Surya Abadi (Abadi) project is located in the district of Muara Badak and Anggana, Regency of Kutai Kartanegara, in the Province of East Kalimantan. The area of the concession was adjusted marginally from 1,017 Ha to 991 Ha in the final Mining, Operation and Production Licence (Izin Usaha Penambangan Operasi Produksi or ?IUP? in compliance of the new Law on Mineral and Coal Mining No. 4/2009 in the Republic of Indonesia), owing to the requirement of providing the necessary buffer zone for the existing gas pipeline in the vicinity. Of this total concession area, the completed drilling program covered 300 Ha. The remaining 691 Ha is presently unexplored.
The concession area can be reached from Balikpapan by land transportation to Samarinda and thence continuing to Selo Lai village. The exploration area is relatively easily reached by 4WD vehicles.
The Mining, Operation and Production Licence (IUP Operasi Produksi) provides the necessary authority to carry out the full scope of coal mining activities encompassing construction, production, processing, transportation and sale. The Mining, Operation and Production Licence expires on 10 September 2025.
The Company entered into a Joint Venture and Mine Management Agreement with PT Toba Jaya (Toba Jaya), an established mining contractor in the Republic of Indonesia in April 2009. Toba Jaya developed the mine infrastructure and commenced coal production in late 2010.
Editing by Reiner Simanjuntak