Churchill Mining intends to increase annual production at the East Kutai Coal Project in East Kalimantan by up to 10 million tonnes to about 35 million tonnes. Churchill and Its Indonesian partners, the Ridlatama Group jointly own the project with 75% and 25% respectively.

The company said that its annual coal production from the Northern Pit would increase from 20 million tonnes to 25 million to 30 million tones while production from the Southern Pit would remain at 5 million tonne per annum. Feasibility and development work has identified that planned mine facilities at the Northern Pit have the capacity to support an annual mining production rate of 40 million to 45 million tonnes. In this context, Churchill has executed project optimization studies which show that the overland conveyor, which will transport coal from the Northern Pit, has an enhanced capacity of 25 million to 30 million tonnes an increase of 5 million to 10 million tonnes.

Churchill is now incorporating this additional coal production into the project feasibility study, which it expects to release during the third quarter of 2010. In addition to the Northern Pit production and further to the MOU signed with PT Perusahaan Listrik Negara, the Indonesian electricity firm, in April 2010, Churchill continues to work on plans for the annual purchase of 5 million tonnes of coal from the Southern Pit, which would fulfill Churchill’s Indonesian Domestic Market Obligation. PLN is reviewing the potential to utilize its coal drying and enhancement technology on the project’s coal, which, in testing, upgraded the coal from sub bituminous to bituminous, considerably increasing its value.

(Sourced from The Asia Miner)