A development study has confirmed the sound economic and technical basis for an open pit coking coal mine at Cokal Limited’s flagship Bumi Barito Mineral (BBM) project. The study estimated it would cost US$100 million to develop the first stage of the Central Kalimantan project which would annually produce 2 million tonnes at a low operating cost of US$67.90/product tonne. This stage would have a net present value (NPV) of US$497 million.  1

The second stage which was investigated in the study is the expansion concept case, involving construction of a coal handling and preparation plant and expanding the mining, port and logisitics operations. The study recommends progressing the project to feasibility stage.

Cokal’s executive chairman Peter Lynch says, “The study provides us with confidence that we have a technically viable and economic project, in a commodity with a great future. The company has defined a clear development schedule and we are now focused on obtaining the necessary permitting and approvals enabling the staged development of BBM.”

Cokal says it will now work to address a number of risks and opportunities identified in the study to progress the project to feasibility stage. “At the same time, we are implementing an exploration program to define sufficient coal resources to underpin the expansion of the project,” Peter Lynch says.

The BBM project area takes in 19,920 hectares in the Murang Raya regency, adjacent to major coal projects owned by BHP Billiton, Indomet Coal and Joloi. It has a JORC-compliant indicated and inferred resource of 77 million tonnes as well an additional exploration target of 200-350 million tonnes of coal in the eastern section of the site.

Coal mined and processed at BBM will be transported 774km to an ocean going vessel at Taboneo in the Java Sea, while coal extracted and screened as direct shipping product will be taken by truck to a port on the Barito River before arriving at Taboneo.

www.cokal.com.au

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