Metallurgical coal group Cokal Ltd has entered into an arrangement to purchase an additional 10% of both the Bumi Barito Mineral (BBM) and Borneo Bara Prima (BBP) projects. The purchase of the additional equity will bring Cokal’s ownership of the two projects to 60%.
Under the arrangements the local partner will be paid a combination of cash and shares at a cost broadly in line with the price the company paid for its original 50% equity position in 2010. Cokal will purchase an additional 10% of the shares in the two PMA holding companies, PT Bumi Barito Mineral and PT Borneo Bara Prima. The transaction will be subject to the normal regulatory approvals.
Cokal recently confirmed high quality premium metallurgical coal at the BBM project in Central Kalimantan. BBM covers an about 20,000 hectares and is immediately adjacent to BHP Billiton’s Juloi tenement, straddling the Barito River.
Cokal’s executive director Pat Hanna says, “We now have initial results from four fully cored boreholes and one channel sample. The results show the coal quality ranges from premium coking coal to ultra low volatile PCI. This confirms that all the seams intersected to date have high value metallurgical qualities.”
Company chairman Peter Lynch says, “Independent marketing advice we have received supports our belief that these coals will be highly sought after due to their attractive attributes. We believe they will be keenly sought after to complement other coals becoming popular in modern coke making blends.
“We continue to receive strong interest from some of the world steel industry’s biggest participants. They are motivated to support the potential for a new metallurgical coal basin which allows them to diversify their current raw material supply away from the existing limited geographic locations which are dominated by the majors.
“Although Indonesia has recently become the largest exporter of thermal coal in the world, the metallurgical coal potential of Central Kalimantan is yet to be realized. Kalimantan is located favourably in a geographic sense, being on the doorstep of the world’s biggest and strongest growing markets.”
Cokal has also signed a joint venture to explore for coal in Tanzania with Tanzoz Resources, which currently holds interests in Tanzania for uranium, gold and coal. Cokal recently announced the start of drilling activity on its 50%-owned Manda project in Tanzania.