Indo Setu hopes to begin coal production this year

PT Indo Setu Bara Resources Tbk (Indo Setu Bara) hopes it will be able to begin coal production at the company?s concession area in Berau regency East Kalimantan, Kontan reported on Wednesday.

Although the company has obtained a permit from the local government to begin production, it is still unable to begin production because it has not yet received a permit from the forestry ministry to use forestry areas in its concession, the company?s President Director Rubijanto said.

PT Setu Bara has secured a mining permit to produce coal on a concession area of 2,000 hectares in Telukbayur, and on a concession area of 1,612 hectares in Sembaliung, Berau regency, East Kalimantan.

The company expects to be able to gradually increase production to 50,000 tons a year on the concession area estimated to hold proven reserves of about 10 million tons of low-calorie coal. About 60 percent of the coal production will be exported to China and other Asian countries.

PT Setu has allocated about US$5 million in capital expenditure to develop the coal mines. (*)