Cokal Inks Funding Pact for BBM Coking Coal Project in Indonesia
Cokal Ltd has announced that its 60% owned subsidiary and owner of the BBM Project, PT Bumi Barito Mineral has executed two binding agreements, a capital participation agreement and international coal marketing agreement, to fund the development of the BBM Project in Central Kalimantan in Indonesia and its coal mining operations. The binding capital participation agreement is for the provision of USD 20 million in funding and has been entered into with International Commodity Trade Pte Ltd, which i incorporated in Singapore for investment and trading in coal. The commitment to provide funding is binding, subject to drawdown upon execution of a corporate guarantee by Cokal and BBM. ICT has advised the company that funds are available for drawdown.
The binding international coal marketing agreement, also entered into with ICT, will enable BBM to market its coal to the international market and will also assist BBM in financing its coal stockpile at the River Jetty. In return, BBM agrees to provide international coal marketing rights to ICT for the marketing of BBM’s coal for its overseas markets.
Upon entering into the agreements with ICT, BBM has given a notice of immediate termination to China Railway 21st Bureau Group International Engineering Co Ltd and Beijing Fidick International Trade Co Ltd in respect of a previous funding agreement. COVID-19 travel restrictions and security requirements for this previous funding have adversely affected the ability to drawdown on this debt finance, which has consequently caused BBM to delay the commencement of its coal production. There are no payments to be made by the company on termination of this agreement.