Geo Energy unit expands E. Kalimantan coal cooperation agreement
Tuesday, October 15 2013 - 01:37 AM WIB
Geo Coal International Pte Ltd. (GCI), a subsidiary of SGX-listed Geo Energy Resources Ltd., has expanded the scope of its recent cooperation agreement with Indonesia?s PT Parisma Jaya Abadi to produce coal from a concession in East Kalimantan.
According to the earlier agreement signed on September 24,GCI and PJA agreed to cooperate in producing coal from a specified area of 150 hectares within the 5,000 ha concession owned by PJA in Kedung Murung and Lebak Mantan Villages, Kota Bangun and Muara Wis District, in Kutai Kertanegara Regency, East Kalimantan.
Geo Energy, however, said in a statement that based on further exploration conducted by the two parties, a further area of approximately 200 ha (Work Block II) in the concession area was found to contain coal potential of a minimum of 6,800kcal/kg (GAR) with approximately 710,000 metric tons and an average stripping ratio of 1:15.
?Accordingly, GCI has on 14 October 2013 entered into an addendum to the (Sept 24) mining cooperation agreement with PJA pursuant to which the parties agreed to include Work Block II as part of the cooperation area,? the company said in the statement obtained late Monday.
PJA guaranteed that the coal potential in Work Block II shall be approximately 710,000 metric tons with a minimum of 6,800kcal/kg (GAR) and an average stripping ratio of 1:15. In the event that the volume of coal produced from Work Block II amounts to less than 710,000 metric tons, PJA will at its discretion, allocate to GCI additional work blocks until the volume of coal produced reaches 710,000 metric tons or refund the down payment paid by GCI under the addendum, the statement said.
Geo Energy said that GCI was given an exclusive right to purchase the coal produced from Work Block II at (i) US$61.55 per metric ton of coal with a minimum calorific value of 6,800kcal/kg (GAR); and (ii) US$71.55 per metric ton of coking coal, both of which will be transacted on a FOB barge basis. GCI shall make an upfront payment of US$2 million to PJA within 14 (fourteen) days from the date of the addendum and a further US$2.97 million by 30 November 2013.
The addendum shall be effective from the date thereof until the production and sale of coal from Work Block II reaches 710,000 metric tons or the parties agree that the coal potential in Work Block II shall not be feasible to conduct further mining.
As previously reported by this news portal, Geo Energy?s Indonesian subsidiary PT Mitra Nasional Pratama on September 24 also entered into a mining services contract with PJA, comprising mainly of overburden removal.
Editing by Reiner Simanjuntak