SouthGobi gets approval to start E. Kalimantan coal production

Vancouver-based mining firm SouthGobi Energy Resources Ltd. announced Wednesday it has been granted permit by local government, which allows the company to commence surface coal mining of the SW deposit on the MCM concession at the Mamahak Coal Project in East Kalimantan.

?The timing of the approval allows for SouthGobi to prepare for the start of coal mining operations in the first quarter 2009,? said COO Gene Wusaty. ?With results from our recent bulk sample confirming high-fluidity metallurgical coking coal, we plan to introduce this coal to selected Asian Steel Mills for testing.?

SouthGobi owns 85 percent of the Mamahak coal project with provisions to increase its ownership position to 100 percent.

The MCM concession area under development at Mamahak is located approximately 30 kilometers from the Mahakam River, a major coal transportation route. The company plans to use barges to transport coal to ocean-going vessels.

The company said construction of 30-km haul road from the SW deposit to the barge port is in progress, along with the installation of a river barge loading terminal capable of loading 600 tonnes per hour which will be located at Long Habung on the Mahakam River.

According to the company, Mamahak Coal Project is ideally located to supply the Japanese, Korean, Indian and Chinese coastal markets and complements its operating coal mine, Ovoot Tolgoi in southern Mongolia.(alex)