INDONESIA — Cokal Limited (ASX:CKA) has signed a binding agreement with mining contractor PT Cipta Bersama Indonesia (CBI) to develop an underground mining operation at its Bumi Barito Mineral (BBM) Metallurgical Coal Mine in Indonesia.
This strategic move is set to fast-track the production of high-quality PCI coal within 18 months, at no cost to Cokal.
The agreement, signed by Cokal’s 60 per cent-owned subsidiary PT Bumi Barito Mineral, focuses on developing an underground mining operation at Pit 1 of the BBM Mine.
Under the terms:
- CBI will be responsible for all mine development and operational costs
- Cokal will handle transport from the stockpile to Batu Tuhup jetty and marketing
- Revenue sharing: 40 per cent for BBM and 60 per cent for CBI
- CBI commits to developing coal processing infrastructure for both underground and other BBM operations
CEO Karan Bangur emphasised the importance of this agreement, stating it’s “another major milestone in BBM’s development and production ramp-up”.
The deal brings forward underground production by at least a decade, adding unexpected value to Cokal’s operations.
The agreement is expected to:
- Provide additional cashflow for Cokal
- Enhance the value of Cokal’s extensive coal transport logistics chain
- Utilise competitive cost structures for underground mining
- Require no upfront capital or ongoing operating costs from BBM
Development of the underground project is anticipated to take approximately 18 months to reach first coal production.
During this period, Cokal plans to further develop its logistics infrastructure to accommodate increased coal tonnages.
Cokal Chairman Domenic Martino highlighted the agreement as “another notable achievement” in BBM’s development.
He credited the company’s largest shareholder and BBM Chairman, Chin Wai Fong, for his instrumental role in facilitating the partnership with CBI.
This unexpected development in underground mining at BBM Pit 1 represents a significant step forward for Cokal Limited, potentially accelerating its growth in the Indonesian coal mining sector.
