Straits secures forestry permit for Sebuku

Singapore-listed coal miner Straits Asia Resources Limited announced on Wednesday that the Minister of Forestry has formally issued the Izin Pinjam Pakai (Borrow and Use Licence) for the Northern Leases at Sebuku, South Kalimantan.

Mining activity and exploration work in the Northern Leases is now allowed to start, the company said.

?This news is the trigger for Straits Asia?s plans to ramp up its Sebuku mine to a steady-state target of between 4.5Mtpa and 5Mtpa over the medium term from only 1.1Mt in 2010. Exploration of the area will begin almost immediately so that a clear and robust mine plan can be developed for expansion in planned phases,? the company said.

?The experience gained at Jembayan, where production has more than doubled in only 3 years, will be a valuable asset for the aggressive production targets that will be set for Sebuku. Infrastructure capacity for the mine is already rated at well over 6Mtpa.?

Sebuku coal, one of Indonesia?s highest grades of thermal coal, is a recognised brand in the international market. The Northern Leases at Sebuku are simply extensions of the seams that have been mined over the last 5 years and are expected to produce the same quality of coal for sale to the same customer base that Straits Asia has developed since Sebuku mine first began production in 1998.

Straits Asia and its mining contractor, PAMA, have a clear plan for mobilisation in the Northern Leases with overburden removal and coal mining now scheduled to commence in approximately 3 months and an initial focus on an area that is directly adjacent to the existing Tanah Putih pit where strip ratios start at approximately 3:1.

Straits Asia is now set to enter a period when its 2 mines are both expanding with the extra benefit of expected significant cost reductions as volumes increase at Sebuku. (alex)