Indo Mines quits JV to develop E. Kalimantan coal project

Australian firm Indo Mines Limited said Tuesday that it would discontinue the proposed joint venture (JV) with Kal Energy Inc. to develop the Graha thermal coal project in East Kalimantan.

?In undertaking its detailed due diligence of the project, the company has determined that there are several issues that, in its view, are unlikely to be resolved in a timely manner to the company?s satisfaction,? it said.

But Indo Mines will continue to review opportunities for other acquisitions, joint ventures, or investments in the resources sector, with the potential to integrate into the company?s Jogjakarta Liquid Iron Project, it added.

In January 2009, NASDAQ OTCBB-listed exploration firm KAL Energy, Inc. announced the signing of a Letter of Intent with Indo Mines Ltd, an ASX listed company, to form a joint venture to develop KAL?s Graha concession in East Kalimantan.

According to KAL, Indo Mines is seeking to secure a large supply of coal for its iron sands project in Jogjakarta. ?The advanced Graha Coal Project has the potential to supply all of the Jogjakarta Liquid Iron Project?s expected power and process needs, with additional capacity for sale to the domestic power market or to meet any increase in demand from future production expansion of the Liquid Iron Project,? KAl said in a statement on January 20. (denny)