Resources Prima begins coal production from second forestry permit

By Romel S. Gurky

SGX-listed Resources Prima Group Limited, a coal mining company with integrated operations including coal mining facilities in Indonesia?s East Kalimantan Province, said on Thursday that its subsidiary PT Rinjani Kartanegara has commenced coal production from a second borrow and use forestry permit (IPPKH2) following its award on July 14, 2016 for an area covering 897.56 hectares.

The company said in a statement that the IPPKH2 is more than double the size of the existing ?borrow-use? permit for the current operating area, IPPKH1, of 308.54 ha. ?After the issuance of IPPKH2, PT Rinjani immediately commenced development of the IPPKH2 west block through exploration and evaluation activities and has produced its first coal from the new area,? the statement said.

It added that between the date of the award of IPPKH2 and August 31, 2016, PT Rinjani produced approximately 88,200 tons of coal from IPPKH2 in addition to coal produced from IPPKH1.

Executive Chairman and Chief Executive Officer, Agus Sugiono commented, ?We have previously announced our target to commence coal production from IPPKH2 by the end of September 2016 and we are pleased that we have been able to achieve this target ahead of schedule by concentrating development in the west block.?

He said that through the commencement of coal production from IPPKH2 and the recently announced cost savings through a further reduction in the waste mining rate from US$2.00 per bank cubic meter (bcm) to $1.80 per bcm with effect from July 14, 2016, the outlook of the Group is improving. ?This is further supported by the gradual improvement of coal prices over the past few months. Since hitting a multi-year low of $50.92 in February 2016, the HBA reference price has rebounded 14.6 percent to US$58.37 in August 2016; a six month high. In early September 2016, the HBA price improved further to $63.93.?

Editing by Reiner Simanjuntak