There has surfaced a possibility on significant increase in metallurgical coal exports from Central Kalimantan,
Indonesia, from now. MGM coal mine operated by PT Marunda Graha Mineral enters into full scale production and at the
same time development projects of new concessions in the same province Suprabari and Haju concessions are now on
progress.
As well known, in Central Kalimantan rich reserves of high quality metallurgical coal exist, but in part due to delay
in upgrading of infrastructure, coal developments are left almost untouched. In effect, at this moment in Central Kalimantan,
PT MGM is the only company operating metallurgical coal mine.
At this moment PT MGM operates opencut coal mine (MGM mine) at Kabupaten Barito Utara in Central
Kalimantan. The types produced coal are high quality semi-soft coking coal and thermal coal, which are exported to
Japan and other destinations through Itochu Corp. owning 23.5 percent shares of PT MGM.
Salable coal production at MGM coal mine remains 1,600,000 MT per year or so, which will be lifted to 2,000,000
MT per year by full scale production sooner or later. The production ratios are about 80 percent of semi-soft coking coal
and about 20 percent of thermal coal, which means production by 1,600,000 MT per year maximum of semi-soft coking
coal is possible.
PT MGM uses Barito River for its coal transport and semi-soft coking coal produced at MGM mine is conveyed
to off the shore of Banjarmasin down Barito River to be further transported to the large coal loading base of PT Indonesia
Bulk Terminal located at Lauto Island. The distance by barge transport extends over 780 km in total (620 km down Barito
Rover and 160 km on ocean). For reference thermal coal is loaded to ocean carrier off the shore of Banjarmasin.
Since the water depth of Barito River steeply fluctuates between rainy and dry seasons, however, there had been
many occasions of blocking the travel of barge due to too shallow a depth (or too deep). In particular in the dry season
there were several spots where the water depth became extremely shallow and sometimes coal shipments of PT MGM
were interrupted for quite a long time.
With the objective of increase in coal shipments during the dry season, however, at the end of October 2006, PT
MGM installed Intermediate Stock Pile (ISP) with coal stock capacity of 200,000 MT at the middle point of Barito River.
As a result currently coal shipments can be smoothly carried out even during the dry season by way of transporting coal
to ISP beforehand during the rainy season.
On the other hand, Suprabari concession is undeveloped opencut concession located 100 km south of MGM mine
where Itochu Corp. owns 23.5 percent interest just like the case of MGM mine.
At Suprabari concession coal production is to be launched in July 2010 with expected salable coal production of
2,000,000 MT to 2,500,000 MT per year. The types of produced coal are high quality semi-soft coking coal and thermal
coal. For transportation of coal produced at the concession, ISP of PT MGM is utilized.
As a result, upon entrance into full-fledged production at Suprabari concession, exports of 4,000,000 MT to
4,500,000 MT of coal from the concession and MGM coal mine become possible.
On the other hand, Haju concession is undeveloped small scale opencut concession located at the border of East
Kalimantan and Central Kalimantan, and is to be developed as the phase 1 of large scale metallurgical coal development
project Maruwai Project striding over the both Central and East Kalimantan.
BHP Billiton of Australia owns 100 percent interest in Maruwai Project including Haju concession and seems to
be intending to start in earnest development of the concession very shortly. Coal production at the initial stage remains
1,000,000 MT per year which will be raised to 2,000,000 MT per year by expansion works in future. The types of
produced coal are semi-soft coking coal and thermal coal.
Coal produced at Haju concession as well is transported by barge down Barito River to Banjarmasin in South
Kalimantan for export to Asian region and other markets. In order to secure stable coal shipments, BHP Billiton plans to
install its own relaying terminal at Barito River.
At Maruwai, BHP Billiton seem to be intending to first develop Haju concession with lower development costs
and thereafter engage itself in development of large scale concession with higher development costs. After development
of Haju concession, that of Lampunut concession is under planning. At the concession metallurgical coal production by
3,000,000 MT to 5,000,000 MT per year is envisaged.
