BHP Billiton intends to spend billions of dollars to develop the Maruwai Coal Project in Central and East Kalimantan with the aim of bringing the project on stream in 2014.
The company has informed Indonesian government officials that it will be making the major investment needed to bring the project into first phase production, which involves annually producing 6 million tonnes of thermal and coking coal.
President director of BHP Billiton’s coal mining units in Indonesia, Indra Diannanjaya, says the company then intends to spend another $2-3 billion ramping annual Maruwai capacity to 11 million tonnes and aims to reach ultimate capacity of 40 million tonnes in 15 years.
There are 7 coal contract of work areas that form the Maruwai Project, all of which are currently in suspension mode due to an order from the Ministry of Forestry, but Indra Diannanjaya says the company has reached settlement with the ministry and expects the suspension to be lifted later this year.
The project is in the middle of Kalimantan and faces logistical problems owing to the distance from trans-shipment points and poor infrastructure.
Indra Diannanjaya says the company intends developing infrastructure and aims to use a combination of small and large barges to transport the coal and then possibly rail for the next phase. If the company is unable to find a third party to develop rail infrastructure, he says it may be prepared to construct a rail line of its own.
BHP Billiton is selling a 25% stake in the project through tender and thus far is yet to make a decision on the successful party.
www.bhpbilliton.com