Coal Fe to start E. Kalimantan coal production in December

Australia stock exchange-listed firm Coal Fe Resources said on Friday that it would start coal production from its Abadi coal concession in Kutai Kartanegara regency, East Kalimantan in December this year with initial target to produce 30,000 tonnes of coal per month.

Heavy equipments were mobilized on site, the company said, adding that construction works on the private hauling road is expected to be completed by the end of November this year.

Company?s announcement earlier said that it would commence coal production from Abadi by August 2009.

The company?s subsidiary PT Techventure Indocoal will jointly manage and administer the mining activities of the Abadi Project with PT Toba Jaya, a subsidiary of Malaysian company, Kok Ann Construction Works (M) Sdn Bhd.

Under the Joint Mining Management Agreement (JMMA), Toba Jaya will finance the capital expenditure, machineries and all necessary costs to commence mining operations.

Under the JMMA, Indocoal will receive a maximum of up to USD3 per tonne upon production and sale of the coal. The mining schedule is designed to accommodate a coal production of up to 900,000 tonnes per annum.

The Exploitation Licence has been issued for the Abadi Project encompassing an area of 991 hectares for a period of 16 years expiring on 18 December 2024. Abadi project has coal resources around 27 million tonnes based on JORC compliance.(denny)