Killara terminates agreement with local coal contractor
Tuesday, April 29 2014 - 05:24 AM WIB
ASX-listed Killara Resources Limited said its board has decided to terminate an agreement with local coal mining contractor PT Berkah Ciwi Lestari Kaltim (BCLK) following recent dispute.
Killara said in its quarterly report released on Tuesday that total coal production at its coal concession in Tenggarong district, Kutai Kartanegara Regency, East Kalimanta during the quarter ending March of this year totaled only 4,740.96 tons.
?Production of coal stopped in early March due to issues with the coal contractor. As at the end of the period production had not recommenced with the board deciding to terminate the contractor agreement in April 2014,? the report said.
Killara signed an agreement with BCLK in December of last year for the production phase of operations, inclusive of overburden removal and coal extraction at the concession run by subsidiary PT Borneo Emas Hitam (BEH).
Elsewhere, the quarterly report said that during overburden removal an extension of seam 6 has been discovered at pit 4E. The coal quality from Geoservices lab?s result of analysis has the following characteristics: CV6540cal/g, TM 6.73%, Ash 10.86%, VM, 41.70%, TS 2.08%.
Additional 28 coal samples from the undeveloped eastern block completed indicating coal qualities in the averages of CV 6833.31cal/g, TM 5.88%, Ash 8.27%, VM, 41.35%, TS 2.43%.
Killara?s technical team has updated the mine designs for Pit 4E, Pit 5E North and Pit 11EA. The calculation of indicated resources Pit 4E, Pit 5E North and Pit 11EA have been completed. Indicated coal resource of 223,729 ton at a strip ratio of 18.43.
Twenty eight additional coal samples from the undeveloped eastern block indicate coal qualities averaging of CV6833.31cal/g, TM 5.88%, Ash 8.27%, VM, 41.35%, TS 2.43 %.
Construction of the Blasting shed commenced together with blasting applications for expansion of coal mining activities in Pit 11EA.
BEH has received formal approval for the production permit, i.e. IUP (Izin Usaha Pertambangan) No. 540/005/IUP-OP/MB-PBAT/1/2011 which is listed as ?clean and clear? by Indonesia?s department of Energy and Mineral Resources and covers a 1,002ha area in the Tenggarong district, Kutai Kartanegara regency, East Kalimantan province.
The mining license had an automatic right for renewal, the renewal application was lodged within the stipulated time frame and manner prescribed and an extension duly issued. The extension period provides for a further term of four years under new permit No. 540/042/IUP-OP/MB-PBAT/XII/2013 that will expire in December 2017.
This successful application and granting of the IUP with the Bupati of Kutai Kartanegara secures a further four year coal production license for the BEH project.
Editing by Reiner Simanjuntak