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IndoMet Coal Project

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BHP Billiton Minerals Exploration discovered the Maruwai coal deposit in Central and East Kalimantan "in the late 1990s".<ref name=Go>BHP Billiton, [http://www.bhpbilliton.com/home/investors/news/Pages/Articles/BHP%20Billiton%20Approves%20Maruwai%20Stage%20One%20Coal%20Development.aspx "BHP Billiton Approves Stage One Development of Murawai Coal Development"], Media Release, June 8, 2014.</ref> The Murawai coal project has only been occasionally mentioned in subsequent BHP Billiton reports and then usually with little detail.
In a 2005 presentation for analysts, BHP Billiton reported that it had spent US$40 million on exploration of the project "to date" and that its concept was to develop the "Lampunut deposit and its associated Logistics Corridor" and that the Lampunut mine "will form a hub, the coal from the other 6 CCoWs will betransported using the Lampunut Logistics Corridor." The presentation optimistically stated that the project would be a 5 million tonnes a year commencing in 2008.<ref>Dave Murray, President BHP Billiton Metallurgical Coal, [http://www.bhpbilliton.com/home/investors/reports/Documents/2005/BHPBillitonBMAPart1.pdf "Analysts and Investors Site Visit"], Queensland, June 2, 2005, pages 64-66.</ref>
In the presentation the company stated that "it is planned to develop 131 km transport corridor from Lampunut to the Mahakam River", "a coal barge port will be built on the Mahakam and coal transported down river 430 km to the Samarinda Delta" and then "an offshore storage vessel of 95,000 t capacity will unload coal from the barges and load the export ships."<ref>Dave Murray, President BHP Billiton Metallurgical Coal, [http://www.bhpbilliton.com/home/investors/reports/Documents/2005/BHPBillitonBMAPart1.pdf "Analysts and Investors Site Visit"], Queensland, June 2, 2005, page 67.</ref>
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, 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 mineable exploitable 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/>
By November 2011 the ''Wall 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." (The $1.34 billion figure refers to the inferred value of the depoit at the time, not the cost of developing it).
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 spokesperson 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>
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 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.
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