Jade delays first coal production to Q4 2008

Singapore's firm Jade Technologies Holdings Ltd said on Thursday that the first offtake from its coal mining project in Mt Galugua, West Sumatra had been delayed to the end quarter of 2008 from third quarter.

?The main reasons for the delay are the tight supply of labour and heavy equipment which are due to the high prices of coal, resulting in many coal mines in Indonesia trying to increase their production. The company understands that there has also been an increase in demand for contractors involved in coal-mining related activities as well as coal-mining and road development equipment,? it said in statement.

Under the mining service and offtake agreements with concession owner PT. Dasacita Pusaka Prima, Jade is to receive approximately 70 percent of the aggregate profits from the overall transactions.

Dasacita has rights to explore and exploit the mining concession for 30 years and is in the process of expanding these rights to allow it to further develop, exploit and export coal from the mining concession of up to 7,000 hectares

Earlier, rumours said that the Indonesian authorities had issued documents stating that the mine was in a natural reserve and that Jade did not have the rights to exploit the area. But, Jade has denied the rumors.

The concession is believed to have a coal deposit worth US$1.03 billion. (denny)