Glencore, MHU offtake deal to end next year

The offtake deal between East Kalimantan coal miner PT Multi Harapan Utama (MHU) and Swiss trader Glencore AG that has last for 3 years will end in the first quarter 2012, an industrial source told Petromindo.Com.

Currently, all of MHU?s coal production that comes from Busang?Jonggon pit has bought by Glencore with volume of around 2 million tonnes per year of high CV coal.

Despite the fact that the contract will expire in the first quarter of 2012 Glencore still has a right of first refusal to buy coal from MHU, the source said without giving the detail about wether the offtake deal will be extended or not.

Next year, MHU plans to increase its coal production to 3 million tonnes from 2 million tonnes currently, by exploiting new pit called Loa Kulu in North Gitan block and Teluk Dalam block, the source said.

?Basically, MHU welcomes any new potential buyer for next year, but the first offer should be to Glencore,? the source added.

MHU was planning to quadruple production to 10 million tonnes in 2015. MHU is a first generation of coal contract of work (CCoW) holder operating near Samarinda, capital of East Kalimantan. (denny)