Kupang hopes permitting process for manganese plant concluded in December
Thursday, October 30 2014 - 04:40 AM WIB
ASX-listed Kupang Resources Ltd said that the permitting process for its planned joint venture manganese processing project is expected to be completed in December.
The company in a statement issued on Thursday that it has obtained positive support from both the central government and local government of East Nusa Tenggara for the planned processing facility that would allow the export of manganese metals from the province.
?The granting of a 25 lease for the current Bolok Process Plant site in September 2014 by the Regional Governor is viewed as a significant step for Kupang Resources Limited (Kupang). This gazetted industrial area requires the approval of the Regional Governor for new agreements or changes to existing agreements,? the statement said.
It added that this step indicates that approval of the key regional permits aligned with the new export legislation is imminent. These two permits are:
- Processing and Stockpiling Permit (which was previously issued but needed ratification given the new export legislation); and
- Sales and Transport Permit (together, the Regional Permits).
?The Regional Permits will allow the domestic purchase, processing and sale of manganese from anywhere in the region under the Governor?s jurisdiction,? the statement said.
This will allow the company to access cash flow but more importantly is the final permitting required for the approval of manganese export.
Kupang said it now understands that the issuance of the central government export approval will be a 3-4 weeks process following the receipt of the key Regional Permits.
The second official Bolok Process Plant site visit on September 17-19, 2014 from senior central government officials from the Investment Coordinating Board (BKPM) with key government technical advisors on manganese is viewed as significant.
The first visit from the testing authority as announced on February 19, 2014 involved the collection of a 300kg sample for testing for export suitability under the then recently enacted legislation.
The presence of BKPM officials on site was to establish Kupang?s investment plans for further downstream manganese processing as is required under the new export act. The focus is what future downstream processing capacity is suitable for Kupang to commit to enable approval under the new act.
The company said it considers that the authorities now consider Kupang?s plant capable of export quality product. They now wish to understand what is a commercial downstream processing that can be viable for Kupang to commit to. The company is comfortable committing to downstream processing on the condition that the required operating inputs (notably power) are available at suitably commercial rates to allow for the commercial production of a manganese alloy.
The company believes two recent port improvements provide another positive signal that both local and federal authorities are positioning themselves to better support Kupang JV?s manganese exporting operation, the one key growth industry in the developing NTT region. The two recent Tenau port upgrades have been completed by the Tenau Port management, specifically for Kupang JV?s use under its current port agreement for its manganese ship loading operations. The first is a new wharf construction for what has been allocated as Kupang?s permanent manganese stockpile and ship loading area once the current temporary user vacates the facility. It is understood the draught at this wharf allows up to cape size vessels (circa 85,000t) to now dock.
The temporary stockpile and loading area allocated for Kupang?s operations has also been upgraded by the port authorities with a jetty and ship mooring facilities specifically designed to facilitate the use of Kupang?s existing ship loading equipment. Domestic shipments will become immediately possible once local permitting approval is ratified. Following this, once Federal approval under the new legislation is obtained, export shipments will be permitted.
The two Tenau port improvements positively impact current and future plans for manganese export. The Company believes that these improvements demonstrate that the authorities are supportive of Kupang?s manganese export operations. The Port Authority?s official web site has an announcement posted which lists the port upgrades and mentions PT Kupang Resources and its proposed manganese export operations as the intended beneficiary of the former upgrade.
?Taken together these events have provided Kupang?s management with a degree of confidence that the permitting process is drawing to a conclusion. The Company does not have the ability to definitely predict due dates with no precedents under the new act to rely on. The expectation is that the regional and federal permitting will be completed in the December 2014 quarter,? Kupang concluded.
Editing by Reiner Simanjuntak