Kangaroo, Chinese firm in coal supply deal

ASX-listed Indonesian coal producer Kangaroo Resources. Limited Reported on Thursday that it has secured an initial export sales contract for coal from the Company?s operating coal projects located in East Kalimantan.

The agreement, which has been signed with a Chinese energy company, Guandong Yudean Farnon Investment Co. Ltd (Yudean Farnon), involves the provision of three trial shipments containing a total of 150,000 tonnes of coal over a two-month period, the Company said.

Upon successful completion of these shipments, KRL intends to extend this agreement to cover additional tonnages of coal.

The company said the price negotiated for the coal is very competitive and is based on a formula reflecting fluctuation of the Chinese Coal Index.

?This represents significantly better value than pricing taken from the local Indonesian market and will provide KRL with a valuable income stream as it continues to ramp-up production from its Indonesian coal portfolio,? it said.

The Company has focussed over the past quarter on taking the Mamahak Coal Project into production in anticipation of delivering into an export coal sales agreement.

To date, the Company has added over 20,000 tonnes of fresh coking coal to the run-of-mine (ROM) stockpile at Mamahak, in addition to the ~30,000 tonnes of coal inherited in the acquisition of this project.

An additional 15,000-20,000 tonnes of coal has been exposed at Mamahak and is ready to be mined and added to the stockpile.

?This coal represents the bulk of the Mamahak coal product that will be required for the initial sales contract to Yudean and KRL is currently in the process of transporting the coal from stockpile down the Mamahak River to the Balikpapan Coal Terminal for export.? (alex)