Mamahak coking coal mine starts production

Australian-listed coal producer Kangaroo Resources Limited has commenced production at its Mamahak Coking Coal Project in East Kalimantan, just six weeks after acquiring an 85 percent interest in the project from South Gobi Energy Resources Limited.

?The operational team has now completed the removal of overburden and exposed up to 15,000 tonnes of fresh coal for mining. Mining of this material is now underway. All coal will ultimately be transported to the stockpile facility at the port loading terminal for barging down the Mahakam River,? the company said on Wednesday in statement.

Kangaroo is targeting initial production of up to 30,000 tonnes of coal per month from the mine.

The project includes a JORC compliant resource of 10.22Mt of coking coal, extensive infrastructure capable of supporting up to 1.5Mtpa coal production, and a large 30,000 tons coking coal stockpile ready for immediate shipping, it said.

Kangaroo has engaged open-cut coal mining consultants ASEAMCO to evaluate and develop a mine design and plan for production at Mamahak. ASEAMCO will carry out further engineering and geological review work in assessing the project. This should result in increased economically recoverable coal quantities within the mining plan for 2010. the firm said.

A haul road, port stockpile and barge loading conveyer have been established at the site. Initial production of up to 30,000 tonns of coal per month will provide the company with an immediate net cash income stream moving forward.

The company?s strategy is to reinvest this cash to further develop Mamahak as well as other projects in its portfolio to achieve its ultimate objective of becoming a +10 Mtpa international coal producer.

In addition to the commencement of mining operations, Kangaroo is commencing the transportation of the 30,000 tons coking coal stockpile to the Balikpapan Coal Terminal. The company is currently negotiating the sale of this coal to a third party with a view to establishing a strategic long term relationship for the company, it added. (denny)