Karka Yasa to spend $27m to develop Kalimantan coal business

JSX-listed property firm PT.Karka Yasa Profilia said it was in talks to expand business to coal mining and trading in Kalimantan and would spend Rp.270 billion (US$29 million) to develop the business.

The company said in a presentation filed with the JSX Thursday that it was in advanced talks to acquire coal mining and trading unit in Tanah Bumbu, South Kalimantan with target to commence production at 100,000 tonnes per month starting late this year.

The company said the project has 25 million tonnes of low CV reserves and would need investment of $16 million to develop.

The second project the company is located in West Kutai, East Kalimantan, with production targeted to commence the second half of 2008 with monthly production of 100,000 tonnes.

The project, according to the company, has 23 million tonnes of low CV reserves and would require capital expenditure of $13 million.

Both mines would be acquired through cooperation and investment scheme with owners.

The company is targeting production increase of 10 percent per annum over the course of 10 years and price of $19 per tonne. (alex)