PT BHP Biliton will start coal mining at the Haju block in Central Kalimantan next year, with initial production expected to be about 700,000 tons per year.
Indra Diannanjaya, the president director of BHP Biliton, told the press here Thursday evening that the company had spent about $40 million on developing the Haju mine.
The Haju Block only makes up a small part of BHP Biliton's coal concession in Lahai, Central Kalimantan, which holds proven reserves of about 4 million tons.
The Haju Block covers a total area of 4,787 hectares, as compared to the overall Lahai concession, which extends to 46,620 hectares.
"Most of the Lahai area is protected forest. So we can only conduct exploration in the Haju Block, which is not protected," he said, adding, "We've completed our feasibility study there (Haju). And for the rest of the Lahai area, we're waiting for the government's decision regarding its status, as actually some parts of it are not categorized as protected so that these could be exploited."
He said that his company planned to export its coking coal, but could not yet identify the buyers as negotiations were still underway.
Beside the Haju Block, Indra said that in 2008, BHP would also start coal production in the firm's other coal mining concession in Maruwai, which has proven reserves of 70 million tons of coal.
The Melbourne-based BHP Biliton, one of the world's largest diversified resources companies, has more than 100 mine operations in 25 countries. Its interests include coal, copper, manganese, iron ore, uranium, nickel, silver, titanium, diamonds, oil and gas.
Operating in Indonesia since 1998, BHP has spent more than US$40 million on exploration in many parts of the country for coal, minerals and petroleum.
Currently, BHP's coal contracts of work are for concessions located in remote areas in the provinces of Central and East Kalimantan. The company also has a nickel concession on Gag island in Papua province.
Indonesia's total coal production almost doubled from 77 million tons in 2000 to 153 million tons last year. The government is launching a campaign to increase the use of coal and natural gas as part of its program to diversify energy use away from oil due to diminishing oil reserves.
The country's coal consumption has continued to increase from year to year. Last year, total consumption of coal reached 41 million tons with most of it being used for power generation. The rest of the country's coal production was exported last year.
According to various estimates, the country's coal consumption could jump to almost 200 million tons by the year 2025.
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