Straits Asia Resources has signed a memorandum of understanding (MOU) to purchase a thermal coal mining business in East Kalimantan, Indonesia.

The MOU has been signed with Vital Century Investment, Pacific Communication Corp and Mitsui Matsushima International.

Straits Asia hopes to complete the transaction by the end of the year and intends to finance it through a combination of debt and equity.

Straits Asia CEO Richard Ong says: "This is a fantastic opportunity for Straits Asia Resources to acquire a growing thermal coal mining business in the Kalimantan region, which is already similar in scope to our Sebuku operation also in Kalimantan.

"The coal quality is similar to Sebuku and our business will benefit from diversification as well as the opportunity to more than double our coal production, and significantly expand our resource base at a time when global thermal coal supply and demand conditions are extremely favourable to coal producers."

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