Australian coal group Cokal has signed Memorandums of Understanding (MoU) to develop two river ports and two small scale coal-fired power stations in Indonesia’s central Kalimantan. The agreements have been signed with the Murung Raya regency, with the aim of exporting coal from the region by mid-2013.  1

The Murung Regency Government head, Bp Willy Yoseph, says he’s happy to have Cokal, with its experience and skills, committed to working with the regency to develop infrastructure for mutual benefit.

Cokal has previously confirmed high quality premium metallurgical coal at its Bumi Barito Mineral (BBM) project in central Kalimantan, with a maiden inferred resource of 60 million tonnes of metallurgical coal comprising 60% coking and 40% PCI announced in December 2011. This inferred resource estimate took into account just 8% of the project’s 19,920 hectares which is next to BHP Billiton’s Juloi tenement.

The first MoU will see Cokal develop two ports on the Barito river for coal stockpiling and barge loading which will service the BBM project and any further Cokal operations. The second is for the development of two 5-10 MW coal-fired power stations which are expected to supply the proposed Cokal mines as well as the local community.

Cokal’s chief executive officer Jim Middleton says the regency government’s development corporation will provide assistance for the development of the infrastructure as a joint venture partner. “This cooperation and assistance will help us to quickly move into the production phase. The regency is enthusiastic about the mine development as it brings jobs, education and prosperity to the region.”

Concept studies for the port infrastructure and power stations are already under way and subject to a positive outcome, Cokal will examine a range of options for securing project finance. “The MOUs and planned agreements are part of expediting metallurgical coal production in this high quality coal basin, while providing significant benefits to the local community,” says Cokal chairman Peter Lynch.

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