Troubled miner secures $20m down payment from trader

IDX-listed troubled coal mining firm PT Garda Tujuh Buana Tbk (GTB) said it had secured long-term coal supply contract with an undisclosed Dubai-based trader.

The Company said in a report filed with the IDX that the trader has given the Company US$20 million as down payment for the 10-year contract.

Under the contract, GTB would supply 1 million tones of coal from October 2009 to December 2011, 2 million tones in 2012 and 2.5 MTPA for the rest of the contract?s life.

The trader can cancel the deal anytime provided that it gives 180-day notice and GTB will reimburse the down payment within 300 days after it receives notice.

GTB, which is operating a mine in Bunyu island, East Kalimantan, is unable to sell its coal due to high moisture of 55 percent. The Company is using a drier to reduce the moisture content, but thus far only able to reduce it to 40 percent, above 15-35 percent moisture content required by most buyers. (alex)