Equatorial Coal fires mining contractor

Australian miner Equatorial Coal Limited (EQX) said on Tuesday it had decided to fire mining contractor PT.GSB resources at Alam Duta mine in Kintab, South Kalimantan due to poor performance and will now conduct mining operations on its own.

Contractor?s poor performance combined with bad weather condition had caused the mine missed production target, the company said.

EQX Managing Director Jim Dracopoulos said, ?Notwithstanding the inevitable disruption to site activities as a result of this change, we remain on track at Alam Duta to make our first sales of coal shortly. The current onsite stockpile stands at approximately 8,000 tonnes and assuming weather and road conditions remain favorable, we expect to sell this coal over the coming month.?

?Our intention is to increase monthly production to 30,000 tonnes per month during the first quarter of 2009 and then ramp up production to 75,000 tonnes per month by June 2009. The decision to take over mining operations is an important step in achieving reliability in our production performance.?

On 6 May 2008, EQX signed an agreement with its Indonesian partner PT. Mega Coal Indomine (Mega Coal) to invest US$2.5 million to take a 51% interest in the net profits from production of coal from the Alam Duta permit. (denny)