Cokal updates C. Kalimantan coal project
Friday, July 31 2015 - 11:52 AM WIB
EXPLORATION
BBM Project
BBM?s Production IUP covers an area of 14,980 hectares (ha), immediately adjacent to BHP Billiton?s Juloi tenement, straddling the Barito River and has multiple seams of high quality metallurgical coal.
GEOLOGICAL ACTIVITY
At the end of the last quarterly period, all geological activities had been completed and is up to date. Whilst waiting for the Forestry Approval to be completed, there has been no further geological work and expenditure has been kept to a minimum.
MINING ACTIVITY
During this quarterly period, a third party had completed an estimation of coal reserves for BBM in accordance with the Indonesian Stock Exchange requirements. As this does not comply with the ASX, Cokal is not in a position to report this estimate. However, the work completed by the third party was able to confirm the estimates used in Cokal Definitive Feasibility Study of the 1st phase of mining at 2mtpa.
ENVIRONMENTAL ACTIVITY
In order to keep expenditure to a minimum whilst Cokal awaits the final approval from the Forestry Dept to allow construction and mining to begin in BBM, revegetation of 90% of areas affected by exploration activity is now complete. Over 15,000 seedlings have been planted along access roads and on drill sites, comprising of some 5,000 trees and some 10,000 ground cover.
BBP Project
No exploration activity was conducted on BBP during this period as all drilling and exploration resources have been deployed to BBM to assist in the delineation of the coal seam in the KLM area.
AAM and AAK Projects
Cokal has a 75% share of Anugerah Alam Katingan (AAK) and Anugerah Alam Manuhing (AAM) projects also located in Central, Kalimantan, Indonesia. The AAK project area comprises of 5,000ha and the AAM project comprises of 10,000ha.
Applications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificates continue to be processed.
SNR Project
Applications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificate continue to be processed.
PROJECT DEVELOPMENT
BBM DEFINITIVE FEASIBILITY
Some further costing, delivery confirmation and price enquiries were carried out during the Quarter in order to confirm both the BBM Definitive Feasibility Study and consequent changes associated with the Detailed Engineering works carried out during the Quarter
MANNING
A significant reduction in staff and employee numbers have been made to limit expenditure whilst awaiting our Forestry Approval. All redundancy and reduction requirements have been carried in accordance with Indonesian labour regulations and Cokal has been assisted in this process with substantial help from both local and provincial labour departments
ENVIRONMENTAL REHABILITATION
Cokal continued last quarter to undertake environmental monitoring on site as part of ongoing baseline studies.
Rehabilitation activities have been substantially completed throughout the previously disturbed exploration areas with both ground cover and trees flourishing in the wet weather experienced during the quarter.
Effort is now being expended into increasing nursery stocks both for the school planting programme and mine and mine infrastructure replanting in the future.
APPROVALS & EXTERNAL RELATIONS
BBM PRODUCTION APPROVAL ADVANCES ? UPDATE
As reported previously Cokal received the Izin Prinsip Izin Pinjam Pakai Kawasan Hutan or ?In-Principal Forestry Permit? for its BBM Project. The In-Principle Forestry Permit is the last stage prior to the issuance of the ?Borrow and Use of Forest Area Permit (Izin Pinjam Pakai Kawasan Hutan (?IPPKH?)) which allows the Company to start construction and mining.
The In-Principal Forestry Permit has been issued for an area covering 1,242 ha which enables the development of the port, haul road and the initial development of the mine site once the conditions of the In-Principal Forestry Permit are met.
Cokal has fulfilled all of the administrative obligations necessary to obtain the full IPPKH. The fully completed IPPKH application was submitted to the BKPM, which acts as the new one-stop integrated service (PTSP) to simplify investment licensing procedures. However due to the technical nature of the IPPKH application and that BBM?s application is the first to be received under the new system the BKPM has referred the application to the Forestry Dept for detailed assessment.
We have outlined both the chronology and steps that have been undertaken to date in order to clarify time taken to date to obtain the formal approval from BKPM who have been waiting for Forestry Dept advice and instruction to provide the formal approval.
Our complete Izin Pinjam Pakai Kawasan Hutan - Operasi Produksi (IPPKH_OP) was submitted to the Badan Kordinasi Penanaman Modal (BKPM) on March 30 2015 at which stage the application was fully inspected and formally registered by the BKPM Forestry Department representatives. At this stage we were formally issued a notice that our application had been received in good order and that the processing time for the complete approval would be within 52 working days.
We continued to ?monitor? the situation both at Ministry of Forestry which was undergoing massive restructuring into the Ministry of Environment and Forestry under a new Minister and steps being carried out at BKPM to process our application which was now following a totally new form of Licence Approval.
From our observations our IPPKH-OP appeared to be in process but with no reference to the 52 working day time limit imposed by the BKPM.
In order to raise awareness at BKPM as the ?driver? of the licensing process we wrote a series of four letters the first being on Working Day 62 (10 working days after we were to be issued our IPPKH-OP). Further Letters were sent to BKPM Working Day 69, Working Day 73 and Working Day 79.
These letters were also copied to appropriate departments at The Ministry of Environment and Forestry including the Minister of Environment and Forestry.
There was a further letter directly to the Minister of Environment and Forestry to ask for a meeting to discuss the delay in the agreed 52 Working Days to issuance of approval.
To date we have not received a response from r BKPM as the issuing authority or the Ministry of Environment and Forestry.
On Working Day 81 (Thursday30 July 2015) we lodged a formal protest with the BKPM directly and not the Forestry representatives at BKPM. All previous letters to BKPM were to the designated BKPM Forestry representatives as per BKPM procedure and guidance.
Following this direct complaint to BKPM we have been advised that a strong response from the Deputy Chairman for Investment Service at BKPM regarding the delay our approval has been made.
Again to date we have not had received any advice or communication from The Ministry of Environment and Forestry that about the delay.
We understand that this is a new process and we are endeavoring to work with the government to achieve a satisfactory outcome. In many ways the government has been proactive in developing the new approvals process. Never the less we remain at the forefront this process and believe we will be the first forestry permit to be issue
BBM WEST BLOCK EXPLORATION IPPKH EXTENSION
In order not to ?mix? the current IPPKH Operation application with a further IPPKH ? Exploration application this application has been put on hold until directly after the issuance of the IPPKH ? Operation for BBM
BBP PRODUCTION APPROVAL ADVANCES ? UPDATE
The IUP production / operation (Mining Lease) licence is still with the Murung Raya Bupati for signing. Whilst expected to be issued during this quarter it is now expected to be issued in Quarter 3 2015.
Cokal has submitted its application for the Clean and Clear Certificate Exploration from the Director General of the National Mines Department formalising the previous award of Clean and Clear status.
TBAR EXPLORATION FORESTRY PERMIT
Cokal continued during the last quarter to progress the Exploration Forestry Permit for TBAR with the Central Kalimantan Provincial Government. Due to Cokal?s focus on fulfilling the administrative requirements to obtaining the IPPKH for BBM, together with workloads within the Provincial Forestry Department the site visit to the TBAR concession has been delayed until Q3 2015. (end of excerpt)