PERTH (miningweekly.com) – A definitive feasibility study (DFS) for the Bumi Barito Mineral (BBM) coal project, in Indonesia, has confirmed ASX-listed Cokal’s confidence that the project could be developed at a low capital cost.
The company revealed on Thursday that a capital investment of $75-million would be required to support the two-million-tonne-a-year operation. Based on the current resource of 261-million tonnes, the project would have an estimated life of ten years.
Operating costs for the BBM project have been estimated at an average free-on-board cost of $97/t, on the basis that the mining, hauling and barging equipment would be supplied by contractors.
The project was estimated to have an after-tax net present value of $366-million and an internal rate of return of 134%.
The mine plan is based on an opencut operation, with the coal to be transported 774 km from the mine site to an ocean-going vessel at Taboneo, in the Java Sea. The transportation of the coal would involve four stages, including trucking, shallow draft barges, ocean-going barges and a floating crane transshipper to the ocean-going vessels.
The coal extracted at BBM would either be processed through a coal handling and preparation plant, or screed as direct ship product coal.
“The DFS confirms that BBM is an economically and technically robust project,” said Cokal CEO and chairperson Peter Lynch.
“We are now focused on obtaining our final forestry approval, which will enable construction to start. The approval has been progressing well and all necessary sign-offs have been obtained and it is now before the Ministry for final approval.”
Lynch added that Cokal was also in discussions with a number of parties to complete project financing.
“I am confident of unlocking further value at BBM by not only accessing a larger portion of the coal resource currently not included in the study, through efficient underground methods, but also adding to the coal resource by exploring the remaining 60% of BBM’s metallurgical coal deposit,” he said.