Indika expects MEA to start production in 2014

By Hisky Damayana

IDX-listed PT Indika Energy Tbk recently stated it expects to see the initial production of the 5,000 hectare concession in Kutai Timur, East Kalimantan belonging to PT Mitra Energi Agung (MEA) to start production in 2014. Up to 60 percent shares of MEA was acquired by the group in the first quarter of this year.

"We expect the concession to start production in 2014 or a year later the latest," said company president director Arsjad Rasjid, adding that Indika is currently focusing on the production preparation of Multi Tambangjaya Utama (MTU) concession.

Rasjid stated that based on initial drilling conducted by internal geologists, MEA's concession is predicted to have up to 40 million tons of coal reserve and more than 100 million tons of resource of 3,750 to 4,000 kcal/kg calorific value coal. The company stated to allocate around US$55.8 million worth of capital expenditure for the concession in the next two years, in which US$ 2.5 million will be spent for land releasing efforts and licenses obtaining, US$6.7 million to finance exploration efforts and US$46.6 million for infrastructure development.

Editing by Audy Zandri