Cokal secures funding to start C. Kalimantan PCI coal production
Wednesday, May 24 2017 - 03:00 AM WIB
ASx-listed mining firm Cokal Limited announced Wednesday it has secured funding for the development of the BBM PCI coal mine at Cokal?s 60% owned Bumi Barito Mineral (BBM) Coal Project, located in Central Kalimantan.
The BBM PCI project area is separate from the company?s flagship BBM Coking Coal development project.
Cokal has executed an agreement to raise A$10 million in funding for the development of BBM PCI via a Limited Joint Venture with Investment Advisor Alliance (IAA). IAA is an affiliate of, and is supported by, Beacon Financial Group Pty Ltd with A$3.5 billion in funds under management.
Under the Agreement, IAA will fund A$10 million in project capital expenditure at BBM PCI in return for 50% of Cokal?s share of profits from BBM PCI operations. The Agreement is binding on both IAA and Cokal but is conditional on completion of a Joint Venture Agreement and regulatory approval.
Cokal has already commenced preparation for construction of BBM PCI, which has been designed to produce premium Ultra Low Volatility PCI coal. Initial site preparations include location of a suitable barge-loading port in close proximity to the mining operation, as well as selection of a mining contractor and a barging contractor, the company said.
Cokal said with the deal, BBM PCI project development is fully funded with first coal production targeted late this year.
According to Cokal?s earlier release BBM PCI is part of strategy to accelerate the commencement of mining operations in the larger-scale BBM Project. BBM PCI will be producing in smaller scale of up to 500,000 tonnes per year with location close to the Barito River in Central Kalimantan.
The objective of the Start-up Project is to deliver a low capital and low cost operation to produce a premium Pulverized Coal Injection (PCI) coal in a relatively short time frame in order to generate positive cash flow to assist funding of the larger BBM 2 million tonne per annum coking coal project, the company said.
Editing by Alexander Ginting