Jade to invest $7m to start W. Sumatra coking coal production

Singapore firm Jade Technologied Holdings Ltd will need US$ 7 million to start production of Mt. Galugua coking coal project in West Sumatra, with production seen to start at the third quarter of this year.

The company said it had used up $3 million of its internal fund and is now negotiating with several potential investors for the balance.

The company plans initial output of 30,000 tonnes of coal in the first phase of production.

The company said further investment of $40 million would be needed - mainly to improve infrastructure- to increase production capacity to 180,000 tonnes per month.

According to valuation report by Jones Lang LaSalle Sallmanns, coal reserves were valued at approximately US$1.033 billion, and the coal contains calorific values range from 6,900 to 8,000 cal/kg based on sample, the company said.

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

Dasacita has right 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.(alex)