Mirach enters Indonesian coal mining venture

Singapore Exchange-listed firm Mirach Energy announced on Wednesday that it has gained the rights to produce and sell coal in an open-pit coal mine in Samarinda, the capital East Kalimantan.

The contract area covers approximately 100 hectares and is excellently located with immediately operational haulage road, stockyard and conveyor loading jetty. The mine produces sub-bituminous coal of caloric value 5100- 5300 Kcal/kg, the company said.

A drilling exploration program conducted during due diligence process estimated proven reserves of 1.1 million tonnes of coal, with potentially much higher reserves to be explored, it claimed.

Based on the terms of an agreement signed with the mine owner, PT GTM and a subsidiary of the Company, the Company has the rights to extract and sell a minimum of 5 million tonnes of coal within a period of four years.

Production has commenced and initial production volume is estimated at 30,000 tonnes of coal per month, with a production target of 70,000 tonnes by the end of the year.

Stripping ratio averages 3.62 for the initial production phase. The first barge shipment of coal is expected in October 2010 and end buyers will come from China, Philippines or India.

?Mirach Energy selected and embarked on a small mine area for its first venture into the coal production business to ensure that the business model and the risks profile of the project sits well with the Company?s current structure and scale. This first coal venture will form a platform for Mirach Energy to develop its coal segment to strengthen and build up a healthy cash flow for the Company,? it said, adding that it is currently negotiating for other larger coal mines with the intention to acquire the rights to increase its coal mining operations. (alex)