WEC, Bayan complete construction of E. Kalimantan coal upgrading plant
Monday, April 27 2009 - 12:36 AM WIB
The plant utilises WEC?s exclusively licensed Binderless Coal Briquetting (BCB) clean coal upgrading technology.
The commissioning process is now well underway and production at the plant is expected to ramp up to full capacity over the next six months with export sales of the more valuable and environmentally friendly BCB coal taking place during that period, it said.
Through the joint venture company, PT Kaltim Supacoal (KSC), the project allows White Energy to capitalize on the price spread that exists between low energy, high moisture sub‐bituminous coals and the much higher energy value bituminous coals.
?The estimated average cost of production of upgraded BCB coal is lower than the mining costs for most global thermal coal producers. This positions KSC as a low cost producer of thermal grade coal that is cleaner to transport, handle and combust with less residual waste than traditional bituminous thermal coal,? it said.
?WEC estimates that the upgraded coal will be marketable with a similar or premium price to conventional high rank thermal coals, due to the similar energy yield, lower pollution profile, and general handling characteristics. Based upon the current and forecasted coal prices for the low rank feedstock and high rank bituminous coals, as well as the estimated capital and operating costs of the BCB technology, the BCB coal upgrading process is expected to enjoy a favourable long‐term coal upgrading price arbitrage.?.
WEC and Bayan have recently commenced formal discussions with a short‐list of external bankers with the objective of negotiating debt facilities to assist with the accelerated rollout of additional plants in the near term. This process will focus on the re‐financing of a portion of the equity contributed by both partners on the first plant.
In addition, both parties have agreed to significantly expand the capacity of the existing joint venture in Indonesia from 5 MTPA in production capacity to 15 MTPA in production capacity. As part of this expanded arrangement White Energy and Bayan have agreed that the expanded capacity will be constructed in priority to any other BCB plants to be built by White Energy in Indonesia.(denny)