Cokal Limited has started mining premium PCI Coal from the BBM Anak project in Central Kalimantan, Indonesia. After completing the initial construction phase, the first barge was loaded on August 19 and began travelling down the Barito River taking coal to an intermediate stockpile.
From the intermediate stockpile at Muara Teweh domestic customers can collect the coal on larger barges.
Cokal says that negotiations are nearing completion with a number of interested domestic buyers and these will be announced after supply contracts have been signed.
Cokal’s recent placement to raise $700,000 has enabled mining to start at BBM Anak. Construction of the mine, which is within the larger BBM project, began in mid-July and coal production commenced in mid-August.
In less than 5 weeks a 1km haul road was constructed from the mine site to the port and three seams, B, C and D, have been uncovered using two excavators, a dozer and two dump trucks.
The first 120ft-long barge was loaded on August 19 with 400 tonnes of PCI coal and began the journey down river.
BBM has the economic benefit of that fact that all coal seams are naturally exposed at the surface and, therefore, the initial mining stages for all open pits involves very low volumes of overburden material to be removed from the seams.
Consequently once the barges arrived at the port, they were loaded within a few days.
In a statement issued on Wednesday, Cokal said about 1200 tonnes would arrive at the Muara Teweh stockpile by the end of the week as four barges had been loaded and began travelling down the river.
Cokal is intending to sell the production from BBM Anak to domestic buyers for use in mineral processing smelters which are located throughout the archipelago.
Meantime, Cokal has also announced the completion of its initial evaluation study based on the Valmin Code for its four coal assets in Central Kalimantan – BBM, TBAR, BBP and AAK.
The report prepared by Tasman Mining has estimated a total value of US$209 million, giving a value of US$127 million for Cokal’s share in each of the projects. The valuation is based on the current consensus long-term price for hard coking coal of US$128/tonne and US$90/tonne for PCI Coal.