White Energy updates E. Kalimantan coal upgrading project
Tuesday, January 31 2012 - 06:34 AM WIB
1. PT KALTIM SUPACOAL (?KSC?) ? JOINT VENTURE WITH PT. BAYAN RESOURCES (WEC 51%)
Update on Legal Dispute with Bayan
As previously advised to the market, the shareholders of KSC, White Energy and Bayan, are currently in dispute over matters relating to the Tabang coal upgrading plant, located at Bayan?s Tabang mine in East Kalimantan, Indonesia.
On 27 December 2011, White Energy?s wholly owned subsidiaries, BCBC Singapore Pte Ltd (?BCBCS?) and Binderless Coal Briquetting Pty Limited, commenced legal proceedings in the High Court of the Republic of Singapore against Bayan.
The issues in the legal proceedings include a claim by BCBCS against Bayan for damages for breach of the Joint Venture Deed between the KSC shareholders, including the obligation to supply coal to KSC and the obligation to provide funding to KSC.
A pre-trial conference in Singapore has been set for 7 February 2012, which is an administrative hearing. The purpose of the hearing is for the Court to monitor the progress of the legal proceedings and give directions as required to ensure that the legal proceedings are progressing expeditiously.
Status of Tabang Operations
As a result of the above legal dispute, KSC suspended operations at the Tabang plant in late November 2011. The Tabang site has since been placed on care and maintenance program, with around 15 staff remaining on site who are responsible for the safeguarding of KSC?s assets. They are being supported by a small number of administrative staff in KSC?s Balikpapan office. All other staff were terminated in late December 2011.
At the time of suspension of operations at Tabang, the various plant modification works being undertaken at site, as outlined in detail in the previously quarterly report and other shareholder updates since that time, were around 95% complete.
2. OTHER BUSINESS DEVELOPMENT INITIATIVES
White Energy representatives in Indonesia continue to work with PT Tri Mitra Bayany (?TMB?) to identify and explore coal deposits in Indonesia, further to the MOU signed by both parties in June 2011.
During the past quarter, White Energy and TMB have short-listed three prospective coal projects, two of which are located in East Kalimantan and one which is located in West Papua.
Due diligence investigations into these projects are currently being conducted and are expected to be complete by the end of February 2012, paving the way for a final investment decision shortly thereafter.
The coal properties being considered by White Energy and TMB comprise a mixture of coal qualities. Most of the resources are likely to be suitable for upgrading using the BCB technology, which has the potential to greatly enhance the value of such projects. In addition, White Energy and TMB also expect that some of the resources in question will not require application of the BCB technology, and can be mined and sold directly into the export markets. (end of excerpt)