Strike settles it by leaving
Wednesday, September 26 2012 - 08:58 AM WIB
ASX-listed Strike Resources Limited recently reported that the company is 'negotiating a settlement' over its rights to mine coal at the Berau Thermal Coal project in Berau East Kalimantan, which involves termination of its operations and exit from Indonesia.
Claimed to own 100 percent right to mine the project through a Co-operation Agreement with concession holder PT Kaltim Jaya Bara (KJB), subject to a royalty to KJB.
Inconsistencies between the enacted legislation and the Co-operation Agreement.
"As a result of changes to the Indonesian mining law it is unclear if Strike would legally be able to pay this royalty should it commence production at Berau. Due to uncertainty created by the mining law changes and issues concerning the estimation of such a royalty at this stage of the project, it is not possible to quantify the potential financial obligation of the Consolidated Entity to pay a royalty to KJB," the company said, adding that company management has deemed it prudent to impair the carrying value of the capitalised exploration and evaluation expenditure in relation to this project.
"The current status of negotiations is a proposed settlement, where Strike will sell the land, data, reports and rights in relation to the Berau Thermal Coal Project," the company said in a statement to the ASX.
The thermal coal concession has an area of 5,000 hectares in Berau, which JORC Resource study revealed 27.7 million tons of 5,600 kcal/kg gross as received (GAR) cv with low sulphur, ash and moisture. Mining reserve is measured at 7.7Mt from 10.4 Mt of JORC Resource at Nyapa West.
Strike's initial plan was to mine and transport run of mine coal by truck for approximately 30 km along a proposed road to a barge port to be constructed on the Segah River, where it will crushed directly on to barges. Barges will then transport the coal approximately 90km to the coast and then on to a trans-shipment point 30km offshore, where it will be offloaded to ships for delivery to customers.
Editing by Er Audy Zandri