White Energy updates E. Kalimantan coal upgrading project
Monday, November 1 2010 - 04:19 AM WIB
1. PT KALTIM SUPACOAL (?KSC?) ? JOINT VENTURE WITH PT. BAYAN RESOURCES (WEC 51%)
Overview
Further to our previous quarterly update, we are pleased to advise that continued progress has been made over the past quarter at the Tabang coal upgrading plant, in terms of both throughput rates of coal processed as well as ongoing consistency in the quality and energy value of the upgraded coal produced. However, as is outlined in more detail below, further analysis and rectification work needs to be completed in respect to the product cooling and handling systems for the upgraded coal, as well as the length of the coal drying column at the plant.
KSC recommenced operations at the plant in early September 2010, following a shutdown period during which engineering modifications were carried out on the briquetter machine hoods to deal with the issue of dust in the upgraded product. Installation of these briquetter machine hoods was recommended by one of the world?s leading dust extraction specialists from the U.S.A. following their visit to site in June 2010. This approach facilitates the separation of excess dust from the upgraded product at the point of briquetting.
These engineering modifications to the briquetter hoods appear to be working satisfactorily at this stage, enabling KSC to produce good quality briquettes. Refer to the pictures attached at the end of this report which provide examples of the product currently being discharged onto the product conveyor at the plant.
In regard to the coal injection system, as reported in the last quarterly report KSC is consistently achieving, throughput rates above the key 50% threshold following some engineering modifications made to this system earlier this year. We continue to monitor performance levels of the coal injection system and at this stage it is performing satisfactorily.
The feedstock coal is now being upgraded consistently from approximately 4,000-4,400 kcals/kg GAR to over 5,800 kcals/kg GAR. KSC has also managed to upgrade the product to over 6,000 kcals/kg GAR for shorter production runs, with a moisture level below 10%.
The next phase of operations is now focused on achieving high quality upgraded product with an energy value of approximately 6,100 kcals/kg GAR and with consistent moisture of around 8%, for sustained production runs.
Remaining Technical Issues
Work to address the remaining technical issues at the plant is currently underway. The following is a summary of the remaining issues identified as well as the work being performed to address the same:
? Coal Drying ? the coal dryer is not reducing moisture levels low enough. The raw coal has an inherent moisture of approximately 25% and a total moisture of approximately 35%. The dryer is currently taking the total moisture down to 10% and our end target is 7-8%. In order to address this issue, the drying column may need further lengthening to give the coal more retention time. Calculations and design of this is underway.
? Briquetting Machines ? there are 16 briquetting machines with a gearbox and motor on each briquetting machine. The couplings between the gearbox and motor have not performed to design and several failures have occurred which has impacted production rates. A new flexible coupling will be installed on each machine. The plant will not need to be shut down to complete these modifications.
? Product Cooling ? the key challenge is cooling the coal briquettes once they have been discharged onto the product conveyor. With the relatively high ambient temperature and humidity the cooling process is not occurring on the relatively short conveyors currently in place at the plant. This is the main outstanding technical issue that needs to be resolved as the briquettes need to cool in order to strengthen. Handling of hot briquettes has been causing too much breakage to date.
? Power Station ? the 10MW power station has had some reliability issues with the primary / secondary fans (bearing failures) and steam valves (casting failures). These have resulted in significant downtimes but have now been repaired. Sourcing of better quality bearings and valves is underway. A soot blower has been purchased for installation during the next planned shutdown.
Coal Sales
Since the end of June KSC has recorded a further 16,000 tonnes of upgraded coal sales. Given that KSCis still awaiting receipt of its own export clearances, these coal sales have been made via Bayan Resources, who have blended this product with their own run of mine material and on-sold the blended coal.
Operational Management
Over the past quarter KSC has significantly added to the depth of its management team, which has been necessary in order to meet its stated objective of taking over the site operational management from Thiess by the end of this calendar year.
Mike Chapman, White Energy?s Chief Operating Officer (ex-Felix Resources Limited COO), has been seconded to KSC in the role of General Manager KSC on a pro-tem basis and has based himself in Balikpapan/Tabang. (end of excerpt)