BARGING & TRANSHIPPINGIndonesian coal exporters traditionally use towe - PDF document

BARGING & TRANSHIPPINGIndonesian coal exporters traditionally use towed barges.Aussie junior barges Kalimantan coal exportsAustralian junior miner, Cokal has devised an audacious transhipment planfor its BBM coal project in Central Kalimantan, Indonesia. The bold play woulddefy significant logistical hurdles that have, so far, prevented development ofthe region's remote deposits. Oliver Probert reports.COAL PROJECT DEVELOPMENTin Kalimantan, the Indonesianportion of the island of Borneo, hasprogressed in a trickle rather than a flood.Kalimantan's interior is scattered with richdeposits of coal. But they lay stranded, lack-ing infrastructure to access the tantalisinglyclose south-east Asian markets.Some big players such as BHP Billitonand Rio Tinto have managed to export coalfrom Kalimantan, and a clutch of local minersproduce coal for domestic energy plants.But smaller mining companies lack the capitalto build the export, infrastructure required togain a foothold in Indonesia.The Bumi Barito Mineral (BBM) project is60% owned, and wholly operated, by Cokal.Indonesian companies have invested to holdthe remainder.Cokal's chairman and chief executive,Chris Lynch. said theBBMproject hasreceived all but one of the approvals neededto commence operations, including its explo-ration license.The Indonesian government has also givenBBM the tick on its mining licence and haulroad and barge-loading jetty plans.BBM houses a JORC resource of 77mt inmultiple seams. comprised of 70mt inferredand 7mt indicated, which Cokal plans toexport at a rate of 2mtpa in the first phase.Cokal has not delineated its plans for fur-ther development beyond the first phase. butLynch has indicated on the company's websitethat the project would be set up with thepotential for future expansions in capacity.On top of the 77mt JORC resource, theBBM project has an exploration target of200 to 350mt in 13 seams within just theeastern section. representing only 40% ofthe BBM project area.BBM's coal is 70% coking and 30% PCI;it is low ash, low sulphur and high calorificvalue, ready for direct shipping. without anyprocessing.But for all of its promise, especially to ajunior miner like Cokal, the BBM project siteposes a significant logistical challenge. It lies300km inland, meaning any coal leaving thesite will have to do so via a winding 774kmbarge journey down the Barito River to thesea, where there is no deepwater port.On the upside, however, the mouth ofthe Barito River is only 3,450km from theChinese mainland by sea, compared to the8,000km trek by sea from Newcastle to China.for example.CONTINUES NEAT PAGEt' Cenlriai..4.71!.71BP IanPF1141.6.00OTransfer points alongCokal's 774krn supply chainOne:55km haul road from mine to thePumaPort, on the upper Barito Rioer Two:500km barge journay down the BaritoRiver to an established mierrnethate stockpileport at Kelanis, iiitere coal is unloaded.awaiting the final stage or transhipment.Three: Ocean going barges loaded fromintermediate 5tockpiles. Coal is transportedthe final 2004im down river to panantem orcapesire vessels. atan Opel sea, anchorageatTaboneo in the Java Sea.(left)The 774km barge route from mine site to deepwater. (right) Kalimantan isthe Indonesian portion of the island of Borneo. Credit Google Earth.II..flown!0,11'6 411,..eitiv.rs5L.161:1 Frog!from-L..Cokal's transhipment operationUp to 2mtpa of coal will be transported774km from a new barge loading facility atPurnama, on the Upper Barito River. to finalloading into export vessels at an open seaanchorage in the Java Sea at the Port ofTaboneo.The transhipping operation comprises threeelements, with several transhipment loading-and-unloading points (see info box).On May 22. Cokal announced it had signeda 50/50 joint venture (JV) agreement withIndonesian maritime engineers MeratusAdvance Maritime, for the transport of BBMcoal down the Barito River.The BBM project site posesa significant logistical challenge.Some companies have experienced naviga-bility issues in the Barito River during dryseason. The shipping channel within whatis a very wide river narrows and becomesrelatively shallow, which has hindered localminers' deep-draught barging operations inthe past.Cokal has developed a plan to circumnavi-gate this problem, proposing the shallow-riverbarges similar to those used extensively on theMississippi River. In fact, some 600mt pliesOld Man River in this way each year.Traditionally, barges on the Barito Riverhave been towed deep-draft ocean goingvessels. The Mississippi style push-bargesthat Cokal plans to employ will be vesselsdesigned for river traverses. They are shallowrunning, in this case drawing a draft of just2.7m. An added benefit of Mississippi stylebarges is increased manoeuvrability comparedto ocean going barges.Capital requirements for stage one ofthe Mississippi style barging operation are$44m, with costs shared evenly betweenthe JV partners.Cokal is seeking a strategic partner for theBBM mining operation. According to Lynch.the company is getting close to finalising adeal. His preference is for a large and longterm partner that will take up a minoritystake in the operation.