Realm Resources signs cooperation agreement with Jatenergy
Monday, March 17 2014 - 12:49 AM WIB
ASX-listed Realm Resources Limited announced Monday a cooperation agreement with another ASX-listed Jatenergy Limited, specifically focused on Realm?s Katingan Ria (KR) coal project in Central Kalimantan and Jatenergy?s adjourning Coal Soil Brik (CSB) project, collectively called the ?Katingan Project?.
Realm said in a statement that the company and Jatenergy have identified potential mutual benefits that may arise from closer cooperation between them in regards to the commercialization of the coal resource in the region and the potential to supply a proposed power station development, and/or export markets.
Jatenergy?s CSB project contains southern extensions of the JORC coal resources defined by Realm and could, if combined, extend the size and/or life of a potential operation.
The agreement is non-binding and encompasses:
? Sharing of information relating to corporate, technical, marketing, contacts and opportunities in regards to Katingan to enhance its commercialization;
? Marketing, promotion, development and operation of Katingan project;
? Establishing a basis to execute and attract investment into the Katingan project, and terms for a possible future combination.
Katingan Ria (Realm 51%), which is located in Central Kalimantan, is shaping up as a simple, open-cut operation that will supply low ash and low sulphur coal ideally suited for modern coal power generation, both domestically and for export. Indicative product specifications are consistent with Indonesian 4,200kcal/kg (GAR) low sulphur (0.2%) coal.
The coal project is located near the town of Tumbang Samba in Central Kalimantan, Indonesia. CSB is situated immediately to the south of KR and contains extensions of the coal resource defined in the KR feasibility study.
The KR project was planned as a 2.5 million tons per annum open cut mine with coal hauled approximately 40km - 45 km to a stockpiling and barge loading facility on the Katingan River. Barges will then transport coal 435 km from the stockpile area to the river mouth for transhipment into coal ships for delivery to market. Coal is planned to be sold ?unwashed?, meaning there is no metallurgical treatment required to achieve a saleable product.
Recent discussions, however, have focussed on the potential to supply a 200Mw power station development near the town of Kasongan in Central Kalimantan (exact location yet to be finalized). This has the potential to see the mine being developed largely as a domestic coal supplier; thereby eliminating a significant proportion of the logistics costs and issues associated with river seasonality. Coal supply, which is required by 2016/17 for the power stations, could therefore be developed for both domestic and export markets (assuming export prices recover for coal from current lows of around US$38/t for KR specifications).
PT PLN, the Indonesian state owned electricity corporation, issued a Request For Proposal (RFP) in 2013 for construction and operation of two 100 Mw power stations near Kasongan in 2016/17. Katingan Ria is the most developed and best defined coal project in the region and this together with the coal having the ideal specifications (as per the original RFP), places the project in good stead to be the preferred supplier of the proposed power station development. Realm is continuing to engage with several of the power station consortia bidders and PLN as the process is still underway.
In addition, Realm and is continuing with discussions with other potential strategic partners and off takers to commercialize the asset.
Editing by Reiner Simanjuntak