White Energy updates Indonesian coal upgrading projects

The following is excerpt from White Energy Company’s quarterly report released on Tuesday

Joint Venture with PT Bayan Resources (WEC 51%)

During the period significant progress has been made in a number of areas, particularly in concluding negotiations on further long lead items and site work issues.

Also progress has been made in final site specific and project module design work.

During August the project will enter a new phase with the mobilization of the power plant contractor to site and the commencement of the production module foundation contractor.

Management will relocate to site inline with the change in the project phase.

Tenders have been received for the foundation works on the production module and balance of plant works. These tenders are presently being evaluated against the project requirements.

The principal Long Lead Items have been ordered (with the exception of the fans). Works are generally reported to be progressing satisfactorily. Tenders have been called for the major contractor in respect of the construction of the production module. Negotiations are presently in progress with companies with the expectation that an appointment will be made during the next quarter (on the assumption that appropriate terms can be agreed).

Some issues have risen around timing concerns associated with the provision of the power plant and the fabrication of the furnace shell. These issues should be resolved during the next quarter. If there are delays with respect to these items then there could be a detrimental impact on the scheduled completion date.

KS is using the patented coal technology to process relatively poor quality coal from Tabang mine into higher quality and more environmentally friendly product. Based on the trial, the technology could improve the energy content of the coal produced from 4,200 kcal/kg to 6,500 kcal/kg.

Joint Venture with Adaro Group & Itochu Corporation (WEC 51%)

During the quarter further work was conducted on final feasibility issues. We are still awaiting final information regarding feasibility findings with the expectation that results will be forthcoming shortly.

Once the results of the feasibility are to hand the Joint Venture terms give the parties 90 days to decide whether to proceed with the project. (End of excerpt)

Editor’s note:

(1) WEC and East Kalimantan coal mining group Gunung Bayan had formed a coal upgrading JV called PT. Kaltim Supacoal (KS), with 51 percent and 49 percent shares, respectively. KS is planning to build coal briquetting plant with initial capacity of 1 million tonnes per annum upgradable to 5MTPA in Bayan’s Tabang mine.

KS is using the patented coal technology to process relatively poor quality coal from Tabang mine into higher quality and more environmentally friendly product. Based on the trial, the technology could improve the energy content of the coal produced from 4,200 kcal/kg to 6,500 kcal/kg.

(2) WEC, Adaro and Itochu are planning 1MTPA coal upgrading plant in Adaro’s mine in South Kalimantan, with intention to increase capacity to 8MTPA. (*)