Overseas & General signs Jambi coal mine JO deal
Thursday, January 6 2011 - 07:30 AM WIB
An initial small payment has been made to secure the contract and a royalty will be paid to the owner through the life of the project. No other payments are necessary, the company said.
This complements OGL?s existing Jambi properties of Chandra and Sokki, giving a total of 2,121 hectares of contiguous lease area.
Small quantities of coal were mined at SSM and Chandra during 2009, but coal mining ceased when the owners encountered operational difficulties and ran out of working capital. A total of 20,000 tones was mined, transported to Pelabuhan Taman Raja port site on the Pengabuhan River and sold domestically.
Several manually dug test pits and eight shallow holes have been drilled near outcropping coal. Coal intersections are reported up to 2.5 meters in thickness.
Quality information shows the coal is a high energy, marketable steaming product with the following characteristics:
Inherent Moisture 7-9%; Ash 3-12% (adb); Sulphur 1.1-1.8% (adb) and Gross Calorific Value 6,180- 6,765 kcla/kg (adb)
OGL Indotrade will commence detailed exploration work in the lease during the first quarter of 2011. A resource target of up to 5 million tonnes of high energy, shallow thermal coal is projected.
OGL expects to develop a mining operation in Jambi during the second half of 2011.
The high energy content of the coal means it will be a sought after product in both domestic and export markets. The existing 23 kilometre road to the Pelabuhan Taman Raja port site on the Pengabuhan River is in reasonable condition and would be used to haul product coal. Trucks of up to 30 tonnes would be used to haul ROM coal, this size truck currently being used by nearby oil palm plantation operators. The river is capable of handling barges up to 275 feet, though as the river is tidal, a maximum of 7,000 tones of coal could be loaded. (kanti)