Cokal has signed an agreement with mining contractor CBI to development its BBM underground coal mining operation in Indonesia.
Chief executive officer Karen Bangur called the agreement a “significant windfall”.
“Cokal is pleased to announced that our 60 per cent owned subsidiary PT Bumi Barito Mineral has signed a binding agreement with PT Cipta Bersama Indonesia (CBI) to develop an underground mining operation at Pit 1 of the BBM metallurgical coal mine,” Bangur said.
“This agreement is another major milestone in BBM’s development and production ramp-up. Importantly, prior to the agreement with CBI, BBM did not anticipate any underground mine development for at least another decade.”
The agreement sees CBI become the contractor in charge of the underground mine development and operations, paying all mine development costs and 100 per cent of ongoing operating costs through to the delivery of coal product.
Cokal will be responsible for undertaking the transport of coal from the stockpile to market, along with the sales and marketing of the coal.
“This agreement brings production forward and is entirely in addition to the current targets of coal production from the open pit operations at BBM,” Bangur said.
“This will add additional cashflow and enhanced value to Cokal. In addition, the additional coal volumes will utilise and enhance the value of the extensive coal transport logistics chain that Cokal has developed and is expanding.”
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