Indonesia’s Minister for the Environment and Forestry has issued the Borrow and Use of Forest Area Permit (IPPKH) for an initial operational area of 1242 hectares at Cokal Limited’s 60%-owned Bumi Barito Mineral Coal Project (BBM) in Central Kalimantan, Indonesia.

Issuance of the forestry permit concludes the final approval process necessary to allow Cokal to start construction and mining. In addition to the forestry permit, Cokal has an approved mining licence and full environmental approval for annual coal extraction of up to 6 million tonnes.

The initial area approved by the Forestry Department covers operation of the port, haul road and initial mine site. In accordance with standard Mining Department practice, the initial operational area is reviewed by the department and extended as required to meet the planned mine development.

Cokal is one of the first companies to receive the forestry permit under Indonesia’s new Jokowi regime, which allows foreign companies to acquire their permits from the BKPM (Investment Coordinating Board).

Cokal’s chairman Peter Lynch commented “We are pleased that the final stage of the forestry permitting process is now complete. With the delays in finalizing the permitting process, behind us, we can now look to the future and focus our efforts on the delivery of the BBM project.

“After establishment of the initial 2 million tonnes per annum operation we have the ability to expand up to a potential 6 million tonnes of premium coking coal operation and this considerably increases our confidence in the success of this exciting project and consequently bringing increased value to shareholders.”

The permit was delayed due to the change of government last year and the creation of a combined forestry and environmental ministry. The new one-stop integrated service was launched on January 26, 2015 by President Joko Widodo to simplify investment licensing procedures for foreign-owned companies like Cokal and improve ease of doing business, which in turn could bolster economic growth.

With the new service, the BKPM has taken over 134 permits from 22 ministries and institutions. These include some of those that have often been stumbling blocks for investment, such as land-use permits and environmental impact analysis permits from the Environment and Forestry Ministry.

BBM’s Production IUP covers an area of 14,980 hectares immediately adjacent to BHP Billiton’s Juloi tenement. The tenement covers ground which has been zoned as Production Forest. Production Forest zones are areas that have been designated by the Central Government of Indonesia to allow for forestry and mining activities by local and international companies.

Cokal is currently the subject of a takeover bid by PT Cakra Minerals Tbk with Cakra due to lodge its Bidder’s Statement with the Australian Securities and Investments Commission by the close of business on August 13.

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