Mining and Heavy Industries

Indonesian asset key to coal rebound: BHP

Borneo seen from space. Photo: NASA

BHP Billiton could soon increase its Indonesian coal mining efforts, with the company’s Indonesian coal boss announcing a second mine for Borneo.

Mark Small spoke this week at the Ozmine Jakarta conference, organised by the Australian government body Austrade.

He reportedly told the forum the company has begun mining at Haju in Central Kalimantan – part of the Indonesian portion of the island of Borneo – where it owns 75% of the IndoMet coal venture.

According to a Fairfax report, he said the company would look to start its next Indonesian mine in the next two years.

“In parallel we have commenced construction of a second CCoW (Coal Contracts of Work) due to come on-stream in 2017,” Small was quoted as saying.

Small said IndoMet fit with BHP’s strategy to only mine large resources, saying the project was based on a world-class metallurgical coal basin.

“To date we have identified a resource of 1.3 billion tonnes with further exploration planned,” he said.

Small reportedly believes the metallurgical coal market, down in recent months, will soon turn.

“We are potentially more bullish about metallurgical coal,” he was quoted as saying. “In the long term I think there will be a recovery, to what extent I am not sure.”

BHP’s Indonesian projects are also cheaper to run than its mines in Australia, fitting in with the company’s continued cost-cutting push.

“Across the business we are focusing on driving costs down,” Small reportedly said. “I think we will continue to see costs come down.”

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