Palace Resources has secured rights to a new Sumatra coal project, MBM, through a joint venture (JV) between its Kalimantan Mining and Logistics unit and RBU, an Indonesian coal miner. RBU is the legal IUP holder of the 200 hectare producing property and all mining approvals.
The JV includes a $2 per tonne royalty plus a RBU reimbursement of costs to date, from Kalimantan.
The MBM site has several coal outcrops and RBU has carried out extensive on site drilling and due diligence is pending. No further consideration beyond the royalty will be granted. In addition, Palace is finalizing settlement documentation and forecasts production in two locations over coming months.
Through its Kalimantan subsidiary, meanwhile, Palace officials have announced a separate MoU with RBU to collaborate on a commercial facility beneficiating coal through an activated carbon product. Palace will earn an initial 30% position in the final JV company.
The process, carbon raising, will upgrade the fossil fuel by driving off volatiles while reducing moisture content, yielding coal with both a higher fixed carbon content and minimal ash. Trials will determine if the coal, once beneficiated, can be used in the steel industry or re-treated to create an activated carbon product. The JV will accordingly build a pilot plant to test feed stock and to define the process.
Pending successful results, the JV will then build a commercial plant which will be specifically designed to accept coal from the RBU and Palace Resources’ controlled projects. The JV will further identify Indonesian projects with suitable coal feedstock while expanding the production capacity of the carbon beneficiation process or build duplicate plants in other locations, if necessary.
Feasibility documents are being prepared and independent experts will be retained to ensure proper procedures are in place during the initial stages of the project. These initiatives will extend business activity for Palace from its traditional exploration and mining activities.