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{{#badges: CoalSwarm|Navbar-Indonesiacoal}}The '''IndoMet Coal Project''' (ICP) (which was initially referred to by BHP Billiton as the Maruwai coal project), covers five potential coal deposits in East and Central Kalimantan in Indonesia. The coal deposits were discovered by BHP Billiton in the late 1990's but initial development of the first of the five deposits within the broad project area - the [[Haju coal project]] -- did not commence until 2008, was shelved in 2009 and recommenced in 2013 with first production slated for 2014.
Other than the Haju mine, the other undeveloped metallurgical and thermal coal deposits are the [[Lampunut coal project]], the [[Luon coal project]], the [[Bumbun coal project]] and the [[Juloi Northwest coal project]] -- are located within seven Coal Contracts of Work (CCoWs). While BHP Billiton's plan is the to develop the Lampunut project after Haju, the main focus of exploration work is on the Bumbun and Julio NorthWest deposits, both of which are proposed as open cut mines.
In its 2013 Annual Report BHP Billiton revealed significant upgrade in the total resources of both Bumbun and Julio NorthWest deposits to 187 million tonnes and 810 million tonnes respectively. While significantly larger than both Haju and Lampunut, the Bumbun and Julio NorthWest despoits deposits have been less intensively explored and the delineation of the coal resource is more speculativeat a far earlier stage.<ref name=AR2013Res>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2013/BHPBillitonAnnualReport2013.pdf "BHP Billiton Annual Report 2013"], September 2013, page 77.</ref>
As of early 2014, the combined coal resource of all the deposits is 1.271 billion tonnes, overwhelmingly of metallurgical coal.<ref name=AR2013Res/>
<blockquote>"we continue to aggressively drill in the area, so, and we are still finding, literally, daily, more out, more about that particular area in that basin. What we do know, there’s a lot of coal in the seven CCWs, or contracted works that we control. We already know that we have a full range of coke and coal qualities, as well as thermal coal. We believe that the qualities that we’ve found will be sought after by our customers in the Asia-Pacific region and I think the Haju trial mine will help confirm that."<ref name=Dave>Dave Murray, President Coal, BHP Billiton [http://www.bhpbilliton.com/home/investors/reports/Documents/2008/steelmakingMaterialsBriefingTranscript.pdf "BHP Billiton plc – Investor Relations: Steelmaking Materials Briefing: Transcript"], BHP Billiton, 24 June 2008, page 25.</ref></blockquote>
Murray went on to state that "approvals and permitting for this mine [Haju] will be sought in parallel" to the development of the "trial" mine. He said:<ref name=Dave/> :"Importantly, we are working with NGOs in the regions on our key operating strategies. We clearly want to ensure that these strategies – our biodiversity strategy, our sustainable development strategy and indeed our mining strategy – are appropriate to the region and in every way world-class,." he said. No other details were provided on what NGO's the company was working with or what their "sustainable development strategy" was.<ref name=Dave/>
===Project stalls===
In March 2010 BHP Billiton announced that it had entered into "binding agreements to create a new joint venture for its Indonesian Coal Project (ICP) with a subsidiary of [[PT Adaro Energy]] TBK (Adaro), which has agreed to acquire a 25 per cent interest in the ICP joint venture. The finalisation of the joint venture was subject to the agreement of the Indonesian government. BHP Billiton holds the remaining 75 per cent."<ref name=JV>BHP Billiton, [http://www.bhpbilliton.com/home/investors/news/Pages/Articles/BHP%20Billiton%20Enters%20Into%20a%20Joint%20Venture%20For%20Its%20Indonesian%20Coal%20Project%20%28Maruwai%29.aspx "BHP Billiton Enters Into a Joint Venture For Its Indonesian Coal Project (Maruwai)"], Media Release, March 31, 2010.</ref>
BHP Billiton President Metallurgical Coal, Hubie van Dalsen, stated in the company's media release that "as we progress development, we will continue our strong commitment to the protection of the region’s outstanding biodiversity.”The company did not mention the sale price of the one-quarter stake.<ref name=JV/>
In late May 2010 BHP Billiton and Adaro announced that the joint venture agreement had been approved by the Indonesian government.<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/news/Pages/Articles/BHP%20Billiton%20Finalises%20Joint%20Venture%20Arrangements%20for%20its%20Indonesian%20Coal%20Project.aspx "BHP Billiton Finalises Joint Venture Arrangements for its Indonesian Coal Project"], Media Release, May 27, 2010.</ref> Adaro announced that its 25% stake had cost US$335 million.<ref>Adaro Energy, [http://www.adaro.com/publication/view/news-release-270510-bhp-joint-venture-english/ "Adaro Energy and BHP Billiton Finalize Joint Venture Arrangements for the Indonesian Coal Project (Muruwai)"], Media Release, May 27, 2010.</ref> At This inferred that the time value of the agreement, the joint venture whole project was Adaro Energy's only metallurgical coal projectUS$1.34 billion.
At the time of the agreement, the joint venture was Adaro Energy's only metallurgical coal project. At the time of the joint venture deal, the total resource of the IndoMet coal project was estimated at 774 million tonnes. This was , based on a December 2009 statement of reserves, estimated at 774 million tonnes. However, of this only 83 million tonnes was classed as a "measured resource" - the most accurate assessment of the available mineable resource. Of this, 11 million tonnes of metallurgical and thermal coal was in the Haju deposit with only a further three million tonnes potential though with a lesser degree of confidence. (BHP Billiton provide no details on the breakdown between metallurgical coal and thermal coal).<ref name=Res>BHP Billiton, [http://www.bhpbilliton.com/home/investors/news/Documents/2010/100331_Indonesian%20Coal%20Project.pdf "BHP Billiton Indonesian Coal Project - Coal Resource Statement as at 31st December 2009"], March 31, 2010.</ref>
The Lampunent deposit was classed as having a measured resource of 72 million tonnes of metallurgical coal with a maximum potential resource totalling 110 million tonnes and possibly 10 million tonnes of thermal coal.<ref name=Res/>
====Stalled but still politically useful====
Even though work on the ground for the project had stalled, the company sought to use the ''potential'' of the project as a political PR weapon against the Australian government which was proposing a 40% resources super-tax profit. In May 2010 BHP Billiton's chief executive, Marius Kloppers, publicly stated that if the tax went ahead it would make the IndoMet project more attractive compared to projects in the Bowen Basin in Queensland.<ref>Matt Chambers, [http://www.theaustralian.com.au/business/offshore-coal-deal-appeals-to-bhp-in-face-of-rspt/story-e6frg8zx-1225872742287 "Offshore coal deal appeals to BHP in face of RSPT"], ''The Australian'', May 29, 2010.</ref>
The following week, a Citi analyst, Clarke Wilkins, made the extra-ordinary claim that BHP Billiton could consider a tripling the production rate of the project if the resources super-tax went ahead. Wilkins claimed:
A map included in the September 2011 presentation - see right -- illustrated the dispersed nature of the deposits.
By November 2011 the ''The AustralianWall Street Journal'' reported that BHP Billiton "plans to begin work on the $US1.34 billion ($1.3bn) IndoMet coal project in Indonesia within weeks, opening up a new mining province to help meet Asian demand." The story stated that the Haju mine was the first stage of the IndoMet project "which could be producing five million metric tonnes of coking coal annually by 2017." It also reported that the project would produce 500,000 tonnes in 2016 and five million tonnes in 2017 with potential for further expansion to 10 million tonnes a year. "PT Lahai will construct a road and a mine (Haju) and related infrastructure, commencing, subject to approvals, in the fourth quarter of 2011," a BHP spokeswoman wrote in an email to WSJ reporters. The spokeperson stated in the email that this would be followed by investments in mines and infrastructure by PT Maruwai and PT Juloi, two other joint venture companies.<ref name=WSJ>David Fickling and David Winning, [http://online.wsj.com/news/articles/SB10001424052970203716204577015053729515874 "BHP Billiton to Begin Work on Indonesia Coal Project"], ''Wall Street Journal'', November 3, 2011. (This story was republished in ''The Australian'' as well.</ref> (It is worth noting that at no time has BHP Billiton ever publicly referred to the project costing $US1.34 billion. However, it is entirely likely that the development of stages beyond the Haju mine could easily cost that.)
The ''Wall Street Journal'' story appears to have been prompted by a November 2 conference presentation by BHP Billiton CEO, Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous. The presentation stated referred to the that "our IndoMet Coal project provides us with another high quality option."<ref name=Mac>Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous, [http://www.bhpbilliton.com/home/investors/reports/Documents/2011/111102%20Deutsche%20Bank%20BRICS%20MetalsMining%20Conference.pdf "Deutsche Bank BRICS Metals & Mining Conference", Presentation to the Deutsche Bank BRICS Metals & Mining Conference, London, November 2, 2011, page 12.</ref> At the time, the IndoMet coal project was the company's fifth largest metallurgical coal deposit.
In its 2012 annual report the company stated that "study work is underway to identify development options across our CCoWs and early work on infrastructure development has commenced."<ref name="AR12">BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2012/BHPBillitonAnnualReport2012.pdf 2012 BHP Billiton Annual Report], BHP Billiton, September 2012, page 37.</ref> However, the company did not mention the project in its September 2012 exploration and development report<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2012/121017_%20BHP%20Billiton%20Exploration%20and%20Development%20Report%20for%20the%20Quarter%20Ended%2030%20September%202012.pdf "BHP Billiton Exploration and Development Report for the quarter ended 30 September 20"], Media Release, October 17 2012.</ref> or its December 2012 quarter exploration and development report.<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2013/130123_BHP%20Billiton%20Exploration%20and%20Development%20Report%20for%20the%20Quarter%20Ended%2031%20December%202012.pdf "BHP Billiton Exploration and Development Report for the quarter ended 31 December 2012"], Media Release, January 23, 2013.</ref>
==Construction begins in 2013==
In early 2013 [[Thiess]], a subsidiary of the Australian construction company [[Leighton Holdings]], stated that "Thiess Indonesia has just signed a new contract worth of US$51 million with PT Lahai Coal (IndoMet Coal) in Feb 2013, to establish the Haju Mine camp and Infrastructure and to construct the Muara Tuhup Port Facility in Central Kalimantan ... This is a 10-month contract, where the kick off project will be in 20 February 2013. The schedule completion of the project is end of January 2014."<ref name=Thiess>[http://www.thiess.co.id/eng/capabilities/projects/lahai-coal-indomet-mine-infrastructure-port-handling "Lahai Coal (indomet) Mine Infrastructure & Port Handling,Central Kalimantan,Indonesia"], Thiess website, accessed May 2014.</ref>
In its report on its first quarter 2013 activities Adaro Energy stated that "the IndoMet Coal Project is on track to begin mining from the Haju mine in the third quarter of 2013. The Haju mine is within the concession area held by PT Lahai Coal in Central Kalimantan. Construction of minesite accommodations, port site accommodations, administrative offices and an industrial area, is underway."<ref>Adaro Energy, [http://www.adaro.com/files/1Q13_Final_Clean.pdf "Quarterly Activities Report First Quarter of 2013 For the Three Months Ending March 31st, 2013"], Adaro Energy, page 13.</ref>
In mid-2013 BHP Billiton stated that the Haju mine project would cost the company $80 million and would produce one million tonnes of coal a year from early 2014. BHP Billiton did not respond to a question on whether an environmental impact assessment of the project had been undertaken or whether a copy in English was available.<ref>Bob Burton, [https://newmatilda.com/2013/07/02/what-bhp-indonesia "What Is BHP Up To In Indonesia?"], ''New Matilda'', July 2, 2013.</ref>
While Thiess was boasting that work on the project was underway, BHP Billiton were still reporting nothing to shareholders. In its quarterly exploration and production reports in March 2013<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2013/130417_BHP%20Billiton%20Exploration%20and%20Development%20Report%20for%20the%20Quarter%20Ended%2031%20March%202013.pdf "BHP Billiton Exploration and Development Report for the Quarter Ended 31 March 2013"], Media Release, April 17, 2013.</ref>, June 2013<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Pages/Roll%20up%20Pages/BHP-Billiton-Exploration-and-Development-Report-for-the-Year-Ended-30-June-2013.aspx "BHP Billiton Exploration and Development Report for the Year Ended 30 June 2013"], Media Release, July 17, 2013.</ref> , September 2013<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2013/131022_BHPBillitonOperationalReviewfortheQuarterEnded30September2013.pdf "BHP Billiton Operational Review for the Quarter Ended 30 September 2013"], Media Release, October 22, 2013</ref> , its December 2013 half-yearly report<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/news/Documents/2014/140122_BHPBillitonOperationalReviewfortheHalfYearEnded31December2013.pdf "BHP Billiton Operational Review for the Half Year Ended 31 December 2013"], Media Release, January 22, 2014.</ref> , and March 2014 operational review <ref>[http://www.bhpbilliton.com/home/investors/news/Documents/2014/140122_BHPBillitonOperationalReviewfortheHalfYearEnded31December2013.pdf "BHP Billiton Operational Review for the Nine Months Ended 31 March 2014"], Media Release, April 16, 2014.</ref> , no mention was made of the IndoMet project.
In its 2013 annual report, BHP Billiton simply stated of the IndoMet project that "early work on infrastructure development for the project is underway" and that "IndoMet remains a valuable future option for our coal business."<ref>BHP Billiton, [http://www.bhpbilliton.com/home/investors/reports/Documents/2013/BHPBillitonAnnualReport2013.pdf "BHP Billiton Annual Report 2013"], BHP Billiton, September 2013, page 39.</ref>
===2013 annual general meeting===
In an opinion column Arie Rompas, the Executive Director of WALHI (Indonesian Forum for the Environment/Friends of the Earth Indonesia) Central Kalimantan Branch, wrote that:<ref>Peter Ker, [http://www.smh.com.au/business/miners-confused-by-indonesian-export-ban-20140115-30v6m.html#ixzz33BCuzqdG "Miners confused by Indonesian export ban"], ''Sydney Morning Herald'', January 16, 2014.</ref>
:"The IndoMet project is situated in the thickly forested and remote Upper Barito Basin. It covers 350,715 hectares, roughly one and a half times the size of the Australian Capital Territory, and has estimated coal reserves of 774 million tonnes. This is two and a half Australia's annual thermal coal exports for 2012. Based on the potential of IndoMet alone, the Upper Barito Basin may be the largest coal deposit worldwide yet to be utilised, and the last frontier of global coal production ... We are extremely conscious of how these mines will affect our communities that have depended on forest and rivers systems like the Barito Basin for their livelihoods for generations."
:"The heavily forested Upper Barito Basin is home to large populations of orangutans and potentially many other species yet unknown to science. These forests form a significant part of Borneo's mega-diverse and world-renowned forest ecosystems. Their value has been recognised and there is an internationally supported conservation agreement, the 'Heart of Borneo' initiative that aims protect them for their biodiversity and carbon sequestration potential. Yet, the IndoMet concessions are located within the Heart of Borneo area.