MIM to start production E. Kalimantan coal mines in Q4 2008

Coal mining and trading firm PT. Modal Investasi Mineral (MIM) plans to start coal production from its East Kalimantan mines in the end quarter of 2008.

The firm's subsidiary PT Mega Alam Sejahtera (MAS) in Berau regency, East Kalimantan, targeted to initially produce 40,000 tons of coal per month and would ramp up the output to 120,000 tons per month in the next couple of months, MIM?s personal assistant to president director Rakhmad Pulukadang told Petromindo.Com on Wednesday in Jakarta.

Currently MAS is negotiating with some prospective buyers to offtake the coal. It will also supply to state electricity firm PT Perusahaan Listrik Negara's (PLN) 10,000 MW power project outside Java under long terms contract.

?MIM has signed LoI with PLN to supply a total of 40,000 ton per month to 2x25 MW Manado coal-fired power plant, 2x7 MW Ternate power plant and 2x25 MW Gorontalo power plant,? he said.

MAS which has 41 million tons coal resources with 14 million tons of proven reserve will supply PLN with coal calorie of 5,100 kcal/kg (ADB).

Meanwhile, its other coal unit PT Damanka which is located in Sangatta, East Kalimantan plans initial production of 20,000 tons per month and will ramp up the output to 40,000 tons per month in the next couple months, he said

Damanka has coal reserve about 6.6 million tons with calorie of 5,500-5,800 kcal/kg, he added.

In December 2007, Singapore-based firm Dayen Environmental Limited announced that it has entered into an agreement to acquire a 6.09 percent stake in Indonesian stock exchange-listed firm ATPK Resources for US$5.3 million.

Dayen has also entered into a mining right agreement with MIM, a 96.77 percent subsidiary of ATPK Resources, it said

The agreement is for the exploitation and marketing of 5.0 million tons of coal from a MIM?s Damanka mine.

Dayen is given the right to mine, remove, transport, process and market up to 5.0 million tons of coal from Damanka over seven years with a fixed royalty payment of US$5 per ton, the company said.

In June 2008, Dayen announced that MIM was unable to perform its obligation as stated in the Mining Right Agreement (MRA) between the two companies. Dayen did not disclose more details. (denny)