Cokal has signed a binding agreement with Cipta Bersama Indonesia (CBI) to develop an underground mining operation at pit 1 of the Bumi Barito Mineral (BBM) metallurgical coal mine in Indonesia.
Located in the Central Kalimantan Province, the BBM mine covers an area of 14,980ha within the highly prospective Central Kalimantan coking coal basin. Cokal holds a 60% interest in the Indonesian metallurgical coal project.
Under the terms of the agreement, CBI will be the contractor responsible for the underground mine development and operations.
CBI will also be in charge of the ongoing mining contractor operations for the PCI coal production.
It will also pay all mine development costs and ongoing operating costs through to delivery of the coal product to the BBM run of mine (ROM) stockpile.
Cokal will carry out the transport of product coal from the BBM ROM stockpile to the Batu Tuhup jetty and then to the market. The company will also supervise the sales and marketing of the coal product.
Cokal CEO Karan 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. This Agreement brings that production forward and is entirely in addition to the current targets of coal production from the open pit operations at BBM. This will add additional cashflow and enhanced value to Cokal.”
Both parties aim to start the development of the BBM Pit 1 underground coal mine with three key stages. Initially, CBI will collaborate with BBM’s technical experts to prepare an updated feasibility study (FS) detailing the planned mining activities.
Subsequently, the contractor will conduct further exploration and reconnaissance to identify new mining areas within the designated concession.
Besides, BBM will secure the necessary approvals for the FS and additional permits required for underground operations.
In stage II of infrastructure development, CBI will import and install coal wash plant machinery, ensuring commissioning meets operational requirements.
The company will also construct underground coal mine infrastructure in coordination with the open-cut mining contractor to avoid disruptions.
BBM will allocate a site for the coal wash plant, secure necessary operational licenses, and provide technical and onsite support to CBI during construction.
During the final stage, CBI will handle underground coal mining and coal wash plant operations. BBM will develop additional logistics infrastructure, such as road hauling and barging services, to manage the increased coal output.
Stage I is scheduled to be completed within six months, with stage II anticipated to be completed within the following 12 months.
