Indo Mines to start coal production from S. Kalimantan mine

Australia-listed firm Indo Mines Limited announced on Tuesday that production will commence shortly at the Mangkok area of the South Kalimantan coal mine belonging to Bangun Buana Persada Kalimantan (BBPK).

The company said in statement that Mangkok's production is expected to reach 10,000 tons in May and 25,000 tons in June 2010.

As previously announced, the company has entered into a conditional agreement to acquire unlisted Australian public company Fireside Resources Ltd, which holds the rights to the Bangun Buana Persada Kalimantan (BBPK) coal project, as well as a number of other resource assets in Indonesia.

According to the company, Fireside has secured a $4 million (US$3.6 million) prepayment towards the purchase of 300,000 tons of high quality thermal coal.

The coal is to be delivered from August 2010 in 50,000 ton shipments and the prepayment will be received by Fireside in three tranches, upon the achievement of certain operational milestones.

Managing director of Indo Mines Phil Welten, said ?The prepayment will be used to facilitate the development of the Mangkok Coal Project, including the mobilisation of the mining fleet.? (kanti)