Straits cleared to expand Sebuku coal production

SGX-listed coal mining firm Straits Asia Resources Limited announced on Monday that the Indonesian government has formally completed a process for rezoning land use across South Kalimantan which will allow the company to exploit its coal deposit in Sebuku Island.

The government decree for South Kalimantan includes a significant area within Straits Asia?s Sebuku coal concession that was previously restricted from mining. That land has now been re-zoned as production forest and is therefore available for mining, the company said.

?With this change Straits Asia is now in a position to execute its plans to recover valuable coal production from this area. The expected timeline to production, including the finalization of standard permits for mining operations, is approximately 9 months,? the company said.

The main re-zoned area at Sebuku is directly adjacent to the North of the current mining operations in the Tanah Putih pit. Coal seams with a cumulative thickness of approximately 12m have been identified along almost the entire strike length of the re-zoned area, highlighting the continuity and extent of the coal basin within Straits Asia?s concession area, it said.

Ground conditions are mostly similar to those covering Tanah Putih, being low-lying and swampy and the stripping ratio is unlikely to show much change from the average figure of approximately 4:1 achieved in the past at Sebuku.

?Straits Asia will shortly commence the fieldwork programmes and detailed drilling of the rezoned area in order to develop an updated mining plan for the operation.?

Commenting on the news Richard Ong, CEO of Straits Asia said, ?The re-zoning effectively unlocks the door to the next stage of Sebuku?s development, confirming the operation as one of the lowest cost, high quality thermal producers in the region.?

Ong added, ?We will move to ramp up production from this area as soon as possible so that we can utilize the full capacity of the new infrastructure facilities recently completed on the Island.?

Straits operates the Sebuku mine which production capacity had recently been doubled to 8MTPA. Sebuku produce slightly less than 1 million tonnes of coal during the first half of 2009. (alex)