Orpheus signs sales contract for coal from ADK Kintap mine

By Demas Simbolon

Australia-listed Orpheus Energy Limited said that it has signed a coal sales contract with an Indonesian steel manufacturing company, located in Banjarmasin, South Kalimantan.

Under the terms of this initial agreement, the offtaker will purchase thermal coal from Orpheus Energy?s Alam Duta Kalimantan (ADK)Kintap mine for one year, commencing December 2012, at the rate of 8,000 ? 10,000 tons per month. The coal will be transported by truck to the steel operation, approximately 140km from ADK, for use in power generation at the facility, the company said in a statement received on Wednesday.

The coal will be sold at benchmark pricing, with quarterly adjustments, and the coal specification requires the following characteristics: Calorific Value 5500-5300 Kcal/Kg (ADB), 33-35% Total Moisture (ADB), 2-4% Ash (ADB), and 0.5% Sulphur (ADB).

Executive Chairman Wayne Mitchell said: ?We recently told shareholders that we were in negotiations regarding longer term contracts for our ADK coal and we are now happy to announce our first offtake agreement. The benchmark pricing outcome represents a vote of confidence in the company?s ability to deliver, and positions us to sell increasing quantities of coal as our mines? capacity grows. This is an important milestone in our plans to establish Orpheus Energy as a significant supplier of coal to both export and Indonesian domestic markets?.

Editing by Reiner Simanjuntak