Senamas starts coal production, first shipment in September

Australian-listed telecommunication firm Cape Range Wireless Ltd said a coal mine in South Kalimantan controlled by its 20 percent subsidiary, PT Metro Consolidated Resources (Metro), has started production.

The Australian firm bought a 20 percent stake in Metro in June this year. The coal concession belongs to PT Senamas Energindo Mulia (SEM) which Metro has right to conduct mining activities.

SEM had obtained a permit from the Ministry of Energy and Mineral Resources to conduct exploitation in the concession, Cape said in a statement.

First shipment from the mine is expected in September 2008 and with an initial volume of about 5,000 to 10,000 tons. The output is then expected to increase over the following six month. Further expansion of the mining activities will also be considered during this period, it said.

The legal due diligence on the coal concession is ongoing and is expected to be completed within the next two weeks. Once the legal due diligence review is complete, the company intends to issue part of the share consideration to the vendors.

Metro has entered into a deal with subcontractor PT Batubesar Mega Nusantara to conduct mining activities in the concession.

SEM is the holder of a third generation coal contract of work (CCoW) over a 49,080 ha concession in Kota Baru regency, South Kalimantan. (denny)