Pan Asia, ZIEC sign deal to develop S. Kalimantan underground mining

Australian firm Pan Asia Corporation Ltd announced on Thursday the signing of a Memorandum of Understanding (MOU) between its South Kalimantan coal unit PT TransCoal Minergy (TCM) and Chinese contractor firm Zhongding International Engineering Co Ltd (ZIEC) covering the TCM coal project in South Kalimantan.

Under the deal, the parties have agreed that ZIEC will provide advice on drilling and project development matters with an emphasis on underground mining at the TCM tenement, the company said in statement

Subject to the completion of additional drilling to define the ultimate resource tonnages and the undertaking of a feasibility study, the MOU provides that ZIEC may, subject to establishing a fair commercial market price and contingent on assisting with project development finance, undertake the underground mining operations and become the majority owner of the project.

According to the company, ZIEC?s experience in the field of underground coal mining in Indonesia is of particular relevance to the TCM coal project, for which the company has stated its ambition to establish an underground mine, targeting production of at least 1.5 Mtpa in 2012.

CEO Alan Hopkins commented ?This early strong expression of commercial interest in the TCM underground project by a group with long experience in underground coal mining is another terrific step forward after the recent announcement of a maiden JORC resource. We do however anticipate additional strong interest as it is still early days for this high value coal project?. (denny)