Medco expects 300,000 tons output from mining unit

By Er Audy Zandri

Indonesia listed energy company PT Medco Energi Internasional has stated that production in one of its mines in Simenggaris, Nunukan, East Kalimantan 'will start to contribute to the company's growth this year', initially expected to start production in November 2012.

"The coal mine will produce about 300,000 tons by year-end," said Medco President Director Lukman Mahfoedz in a statement without disclosing further detail.

The company, through subsidiary PT Medco Energi Mining Internasional, had on June 2009 acquired two mining business rights (IUP) for coal exploration in Nunukan, East Kalimantan, through the acquisition of PT Duta Tambang Rekayasa (DTR) and PT Duta Tambang Sumber Alam (DTSA) at the acquisition value of US$886,000.

DTR's Exploration IUP is valid till 2017 in up to 1,700 hectares of concession area, in which drilling of 389 holes (13,378m with interval 100-200m) and logging 289 holes (10,289m) has been initiated. Results revealed that the area has up to 4.4 million tons of mineable reserves, SR 15 for 509 hectares at South and South Extension Block while still has additional potential measured resources at 8.0 million tons in the Middle and North Block.

Medco initially stated that the area should be able to produce up to 500,000 tons of coal with 6,800 kcal/kg cv (ADB) per year.

DTSA's IUP covers a concession area of up to 4,492 hectares. Its exploration permit is valid up to this year and the company has so far completed drilling of 218 holes (8185m with interval 150m-250m) and logging 141 holes (5300m). Its measured resource on the 582 hectares of west block is estimated at 3.9 million tons at the depth of 50 meters, allowing up to 250,000 tons of production per year starting 2014.

The concessions are located 15 kilometers and 20 kilometers, respectively, from loading port which is about 51 kilometers barging to Nunukan anchorage.

Editing by David Mustakim