Coal Fe wants to acquire coal mines with high calorie deposits

By Romel S. Gurky

Newly-appointed Managing Director of ASX-listed Coal Fe Resources Ltd, Robert Swarbrick said that his focus would be on acquiring coal projects in Indonesia which possess high calorific value coal.

Swarbrick, who was appointed into the current position last week, said that this would form part of strategy to deliver greater returns to investors of Coal Fe, which operates a coal mine in Kutai Kartanegara Regency, East Kalimantan, via a company called PT Pancaran Surya Abadi (PSA), a joint venture with local firm PT Toba Jaya.

?The Abadi (PSA) project provides the company with access to the local coal market, but the lower calorific nature of the coal will provide limited returns to shareholders. My focus now is on acquiring near production coal projects in Indonesia, which possess high grade coal, where the company can be the owner operator producing positive cash flow in 12 months and delivering returns to shareholders. The company?s time and resources can be better directed at producing assets that will produce greater revenue than the Abadi project,? he said in a statement received on Monday.

The statement said that the PSA coal project is a low grade coal mine producing 5,100-5,300 K Cal coal which is consumed in the local domestic market. In the December 2013 quarter, 36,294 metric tons were sold providing total 2013 sales of 248,982 metric tons. Under the mine management agreement with PT Toba Jaya, the company received a royalty of $1 per ton from these sales.

The statement said that the company is also working towards securing funding from a leading Australian financial services group to fund any potential coat acquisitions. A further update will be made in due course.

Editing by Reiner Simanjuntak