Indian firm sign MoU to acquire C. Kalimantan coal firms

Indian firm Rohit Ferro-Tech Limited (RFTL) through its wholly-owned Singapore-based subsidiary SKP Overseas Pte Ltd (SKP) has signed a memorandum of understanding (MoU) with PT Pacific Samudra Perkasa (PSP) to buy shares in two coal mining companies in Central Kalimantan.

Under the MoU, the Indian firm will buy 60 percent interest owned by PSP in PT Palopo Indah Raya (PIR) and PT Bara Prima Mandiri (BPM).

PIR has a 3,843 ha concession which is believed to have 20 milion tons of coal deposit with a calorie content of 5,400-5,600 Kcal/kg. The mine is expected to start production in July 2008, the Indian firm said in a statement filed with the Bombay stock exchange on Wednesday.

Meanwhile, BPM has a concession measuring 3,851 Ha. The mine is expected to start producing coking coal (7,800-8,300 Kcal/Kg) in June next year from a reserve of around 5 million tons.

Aside from exploration and exploitation contract, both companies also have marketing and transportation licenses, the company added.

SKP will have a long-term off-take agreement at preferential rate with PIR and BPM to buy 60 percent of their output for RFTL and third parties.

RFTL also said it is also in the process of floating a 95-percent owned mining service company in Indonesia which will hold a long-term mining contract with both mining firms. (denny)