Indonesia Mining 2012 - GBR

Mining IN Indonesia
The attention that many in this segment
pay to environmental concerns is another
example of how these companies have
stepped up their level of professionalism.
PT Dewata, headed by the charismatic Paulus
Broto, is one example of this. “Indonesia
is a great country that has been blessed
with unmatched physical beauty and natural
resources. To maximize revenue’s and
minimize environmental impact, PT Dewata
aims to have one of the most efficient operations
in Indonesia.”
The efforts of PT Dewata and a few others
are both encouraging and indicative of
a new awareness. “We commence our reclamation
activity from the very beginning of
operations. Many companies in Indonesia,
large and small, fail to see the importance
of taking this step early on, beginning reclamation
only after the area has been mined
out for a number of years. By doing this,
companies fail to minimize their environmental
impact,” said Broto.
In addition to their activity in Kalimantan,
the company has ambitious plans to
begin mining operations in Sumatra, where
it believes the future of Indonesia’s coal industry
lies.
Other companies that fall under this
category include the likes of Atlas Coal, a
rapidly expanding coal producer that has
tapped into the Indonesian capital markets
to fuel its future growth, and Harum Energy,
owner of the second largest coal processing
port facility in East Kalimantan.
Indonesia’s often overlooked
coking coal industry
Indonesia is not the first country that comes
to mind when it comes to coking coal. Although
the Southeast Asian giant has surpassed
Australia as the largest exporter of
thermal coal, its coking coal output pales
in comparison to the quantities exported by
leading nations.
From a global standpoint, and in the
opinion of Ken Allan, marketing director,
Borneo Lumbung, Indonesian coal remains
under the radar. “There has not been very
much coking coal discovered in Indonesia,
which meant that acceptance of our product
was relatively slow. Indonesia is an active
volcanic region with relatively young
geological formations, and has not had the
chance to create as much coking coal as
Australia. However, perceptions are starting
to change, and the country is emerging
as a consistent supplier of coking coal to
the global markets. Indonesia’s coking coal
industry is not huge yet, but we anticipate
that production and demand will increase
substantially in the future.”
Patrick Hanna, executive director, Cokal.
Borneo Lumbung Energi and Metal produced
5 million mt/y of premium Indonesian
coking coal in 2011, with plans to
significantly increase capacity in the very
near future.
Cokal, an ASX-listed company, is currently
developing its flagship Bumi Barito
Project (BBM) with aspirations to become
a large coking coal producer in Kalimantan.
Formed in December 2010, the company
subsequently started exploring BBM
in 2011.
“Shortly after commencing exploration
at BBM, we were able to find an abundance
of high-quality coking coal. One of
the advantages of Indonesia is that it has
shallow economic coal that can be found
easily. Our coal has been tested in the
same laboratories used by BHP and Rio
Tinto. Tests have shown that the concession
contains clean, low sulphur and ash,
coal that will be in high demand once sold
in the marketplace,” said Patrick Hanna,
executive director, Cokal.
As is the case with all concessions located
in central Kalimantan, logistics is a
challenging problem for the BBM project.
To overcome this, Cokal plans to employ a
unique system of shallow-river barging.
“The most important aspect of Indonesian
logistics is that there are numerous
rivers that allow for barging to occur. This
makes coal mining even more attractive
as barge transport is the cheapest form of
coal transportation anywhere in the world.
Our BBM concession is 750 km up river
from the Banjarmasin port where we plan
to ship the coal. Cokal will utilize a system
designed specifically for shallow water
barging. As part of our feasibility study, we
brought in an expert from Kentucky who
specializes in shallow-water barging systems.
Having completed a single-line depth
survey of the river, Cokal has not found any
obstacles that will prevent barging from taking
place,” said Hanna.
56 E&MJ • JULY 2012 www.e-mj.com