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EKCP project update

Churchill Mining PLC, the Indonesian-focused coal mining company and its Indonesian partners the Ridlatama Group, have announced a progress update for the East Kutai Coal Project (EKCP), in which Churchill has a 75% interest.
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The EKCP has a 2.481 bt JORC resource of which 956 mt has been classified as a JORC Probable reserve. Feasibility Study work on EKCP by Churchill is complete and has identified the potential to exploit the project’s thermal coal reserves at a preferred annual production rate of 20 mtpa.

The company has put the project’s infrastructure items (mine stockyard, overland conveyor, port/ship loader and power station) out to tender and this process is well advanced.

To date the bids received have been well under predicted costs due to the resurgence in global manufacturing and engineering capabilities following the global financial crisis, says Churchill.

It anticipates completion of its tender process and final review/evaluation of the bids by the end of January 2010. At this point the company will be in a position to further inform investors of EKCP’s expected capital cost and life-of-mine financial returns.

Churchill anticipates project construction work at EKCP will start in 2010 and will take two years to complete. The company consequently has applied for all the necessary licences and permits with the relevant Central, Provincial and Regional Indonesian Governments to expedite development.

At site Churchill recently began mining a bulk sample for testing at the Australian Coal Industry Research Laboratory in Queensland, Australia, in order for Churchill to advise potential customers of the coal’s handling abilities, combustion, boiler performance and other quality characteristics.

Company representatives also recently visited 17 companies on India’s East Coast to discuss the project and potential off-take agreements. Churchill came away highly encouraged by the growth profile of future Indian coal demand – it was established that India will need a minimum of 100 mtpa of new EKCP-styled coal to meet expected future energy needs.

Churchill Mining’s CEO Paul Mazak commented: “We are very pleased with the results of EKCP Feasibility Study and look forward to announcing the associated results of our economic modeling early next year.

"As more data and certainty has been brought to bear on the EKCP project, so too has been the level of interest from the international coal community."

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