Junior Australian coal miner Kangaroo Resources will delay the restart of operations at its Mamahak coal mine to await completion of an operational review. The company suspended operations in November last year due to an industrial dispute between the mining contractor at Mamahak and the on-site staff.  1

Kangaroo has used the downtime to review operational efficiencies of the mine plans and strip ratio, contractor performance, barging strategy and exploration practices at the site in a bid to reduce costs and counteract the effect of falling coal prices.

“The review identified cost-cutting measures, including the potential to lower the mining strip ratio, which would result in reduced targeted production rates. We have now terminated our agreement with the contract miners and will pay $2.8 million in compensation to the contractor for infrastructure built on site, and to offset the cost of demobilizing equipment, as well as to cover termination fees associated with equipment on standby,” says managing director Mark O’Keeffe.

Kangaroo has also signed an agreement with another mining contractor and is in discussions with barge operators as part of a plan to ship stockpiles totalling 133,000 tonnes of coal, with an estimated profit value of Aus$10 million.

The Mamahak project was acquired by Kangaroo in 2009 from South Gobi Energy Resources, along with all of its Indonesian mining assets. It is regarded as a high-margin, long-life coking coal project hosting four concessions across 22,000 hectares in East Kalimantan for a JORC-compliant resource of 10.5 million tonnes. The mine site began operating in February 2010 and was producing coking coal at an annual rate of 250,000 tonnes.

www.kangarooresources.com

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