Perth-based Realm Resources is in discussions with strategic offtake and finance partners to advance its Katingan Ria Coal Project in Central Kalimantan.

Now that the feasibility study for the site has been completed, Realm says negotiations have stepped up and are being assisted by a gradual recovery in price of 4200 kcal GAR coal from Katingan Ria to around US$43/tonne, which is above the base case Life-of-Mine cash cost forecast.

The Indonesian State-owned electricity corporation PT PLN has issued a Request For Proposal (RFP) to pre-selected bidders for construction and operation of two 100MW power stations near Kasongan in Central Kalimantan about 135km downstream from the project’s proposed Upper Stockpile. Katingan Ria coal specifications are ideally suited for power station furnaces.

Realm has also taken significant steps towards upgrading the site’s current permit to a Final Forestry Operations permit which will allow coal mining operations and production to commence.

The company’s chairman Richard Rossiter says “We are encouraged by recent progress at Katingan Ria, coinciding with the gradual strengthening of regional markets for its coal product. Together with our partners, we remain committed to bringing Katingan Ria on stream as a simple, low cost, 2.5 million tonne/annum operation in the near term.”

The 40-million tonne Katingan Ria prospect is an advanced thermal coal exploration project with the potential to progress to mining in the coming months. It covers just over 5 hectares within the Katingan Hulu district, about 175km northwest of the regional capital Palangkaraya. The mineral concession area is overlain by two forestry production concessions that have mostly completed their operations, which is expected to simplify the permitting process for production to commence.

Realm acquired a 51% stake in the project in 2012 after conducting technical due diligence which confirmed the existence of a main coal seam that ranges in thickness from 1.9-5.2 metres. Two thinner seams between 0.5-1.5 metres have also been confirmed. It is shaping up as a simple, open-cut operation that will supply low ash and low sulphur coal ideally suited for modern Indian and Chinese power generation.

The project is planned as an open cut mine with coal hauled approximately 45km to a stockpiling and barge loading facility on the Katingan River. Barges will then transport coal 435km from the stockpile area to the river mouth for transhipment into coal ships for delivery to market. Coal is planned to be sold unwashed, meaning there is no metallurgical treatment required to achieve a saleable product.

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