Energy Earth has budgeted Bt3.82 billion to acquire a coal-mining licence in Indonesia to sustain its reserves for 10 years.
Managing director Khajohnpong Khamdee said yesterday that its wholly owned subsidiary PT Tri Tunggal Pitriati (TTP) would take over the licence from Jhoswa Mahakam Mineral (JMM).
The mine in East Kalimantan has an estimated 43.05 million tonnes of coal.
The company plans to start surface mining in the second quarter of next year and supplying customers in the fourth quarter, when it will begin realising revenue from selling coal.
JMM has submitted an application to upgrade from exploration to production and obtain a principal licence as a requirement for securing a “forestland borrow-to-use” permit. The concession is for five years and can be extended five years at a time until the reserves are exhausted.
“TTP will use a loan from Earth to purchase those assets from JMM. We hope the deal will provide security in the coalmine business, reduce risks in finding resources in the future, get higher profits and increase the value of the company’s shares in the long run,” Khajohnpong said.
Energy Earth also has reserves of 3 million tonnes in South Kalimantan, which could be produced by next year, and 40 million tonnes in a Myanmar mine. Combined with East Kalimantan, total reserves will be 80 million tonnes, which should be able to fill the demand of its customers for 10 years.