Cokal Bumi Barito Mineral?s AMDAL study completed

By Harri Roy Gunawan

ASX-listed Cokal Limited said that the Environmental Impact Assessment Study, or AMDAL, for its 60 percent owned Bumi Barito Mineral Coal Project (BBM), located in Central Kalimantan, Indonesia, has been completed.

The company said in a statement received Monday that the AMDAL complies with Indonesian environmental and mining regulations and covers the integrated development of the BBM mine, haul road and river barging terminal.

The statement provides further details as follows.

The EIS covers the mining operations planned for the Eastern Block of the BBM project for up to 6Mtpa and has been submitted to the Central Kalimantan Provincial Government Environmental Agency (Badan Pengelolaan Lingkungan Hidup (BPLH)) for approval. The study was overseen by CDM Smith a global engineering and environmental consultancy supported by numerous specialized Indonesian sub-consultants.

The study commenced in late 2010 and included environmental and social baseline studies and assessments, and community consultation with local villages and communities. Importantly the area covered by the AMDAL does not have any protected forest zones and is suitable for mining activity by open-cut methods under a production forestry license. Approval of the AMDAL will enable the upgrade to the tenement from an IUP exploration to an IUP production / operation (Mining Lease). The approvals process remains on track to allow construction to commence in Q4 2013.

The AMDAL covers the expected full development of the Eastern Block of the BBM project consistent with Cokal?s Prefeasibility Study (PFS) which envisages the development of the BBM project in two stages, an initial 2Mtpa direct ship operation with an expansion subject to the delineation of sufficient additional resources from the 200Mt to 350Mt Exploration Target1. The PFS highlights the potential for BBM to be developed as a low capital cost, low operating cost metallurgical coal project.

Since the completion of the PFS in November, the company has moved quickly not just in progressing the regulatory approvals but also with:

? Exploration ? with significant additional drilling capacity now on site
? Land Acquisition ? the land zone for unloading equipment and supplies, and road access
? Development ? construction of a major base camp and tenement access roads well advanced

Currently the company has three large capacity drilling rigs on site which are focused on the delineation of additional resources from the previously announced Exploration Target1 of 200 to 350Mt to a depth of 200m. These rigs are in addition to the five smaller capacity rigs which are conducting in-fill drilling in support of the development of a detailed mining plan for the initial 2Mtpa direct ship operation.

Activity on site includes significant earthworks with four dozers and two excavators developing access roads to support the expanded drilling activity and the eventual development of the project.

Logistics have been improved with a heavy equipment landing area completed, construction of a 70-man camp and support facilities such as workshop, warehouse and fuel depot underway.

PROJECT OVERVIEW
The Bumi Barito Mineral Coal Project (IUP 188.45/273/2010) is situated in Central Kalimantan , Indonesia in the prospective metallurgical Upper Barito Coal Basin , Regency of Murung Raya.

The Project covers an area of 19,400 hectares. The Project is adjacent to the BHP Billiton?s, Indomet Coal, Joloi Project in Murung Raya Regency. BBM has reported an Exploration Target1 of 200 to 350Mt in thirteen seams within the Eastern Block of the BBM IUP (approximately 40 percent of the Project area), as well as an additidnal JORC Resource of 77Mt in four seams comprised of 7OMt Inferred and 7Mt Indicated. The BBM Project is proposed to produce up to 6.5Mtpa Run of Mine (?ROM) estimated to provide 5.6Mtpa saleable product, with first coal scheduled in 1H 2014.

Cokal Executive Chairman, Peter Lynch, said ?The PFS provided us with significant confidence that we have a technically viable and economically compelling project, in a commodity with a great future. We are now focused on completing all the necessary applications and approvals required to take the project into production.

The BBM Project is geographically strategically located to supply metallurgical coal, with excellent product properties, to customers in the Asian sub-continent. It enables Cokal to enhance the supply diversification from this emerging coking coal basin in Central Kalimantan . These features for our flagship BBM Project add up to great value for our potential customers and a real opportunity for our shareholders.

Already we have commenced further detailed work and studies in areas where we have identified critical path scheduling issues and / or technical requirements to commence production from BBM in early 2014. In conjunction with the positive community feedback from our local programs, we believe we have a tremendous opportunity to provide further benefits to the local, provincial and national arenas, in addition to the already mentioned stakeholder advantages.

The Board has directed our people to proceed to finalise the studies and complete regulatory & legal obligations for operations to commence in this low capital, high return Project.?

Editing by Reiner Simanjuntak