PERTH (miningweekly.com) – A review of ASX-listed Realm Resources’ 51%-held Katingan Ria coal project, in Central Kalimantan, has resulted in a 20% reduction in the proposed free-on-board cash cost over the project’s mine life.
Realm reported on Thursday that industry operating costs had declined by up to 30% over the last two years, in parallel with falling commodity prices and profitability, as well as the strengthening of the US dollar.
As a result of this, Realm undertook a review of the feasibility study on the Katingan Ria coal project, which was based on a three-million-tonne-a-year operation.
The review resulted in a 20% saving to the total life-of-mine cash costs, reducing the expected cash costs from the $39.22/t predicted in the 2013 feasibility study, to $31.32/t.
Realm said that the greatest cost savings were achieved by incorporating a greater use of doze push, rather than truck and shovel mining methods into the feasibility study, as well as the use of larger road trains for coal haulage and using a different barging configuration with more efficient barges.
However, the review has also resulted in Realm reducing its long-term price forecast for Katingan Ria’s coal from $52/t to $42.50/t, which has resulted in a 10% decline in the project’s projected net present value, from $111-million to $100-million.
The Katinga Ria project was in the final stages of permitting.