A financing from investment firm Chapmans Ltd will enable Jatenergy to boost production at its Indonesian coal projects. An initial injection of $200,000 will go into the Jongkang project for a 50% profit share with Jatenergy.
Chapmans has the option to invest a further $850,000 into the Geronggang project, or Blackrock Energy, which houses the Barata projects. Jatenergy owns the rights to five coal development projects in Kalimantan.
Nearly 80% of production is rated sub-bituminous, having a niche position in domestic and international markets from strong demand for environmentally friendly, low ash, sulphur and nitrogen thermal coal.
The investment will enable Jongkang to transition into a higher production facility with a monthly target of 20,000 tonnes. If Chapmans elects to invest the further $850,000, Jatenergy will establish a site at Geronggang to take 2-3 months to bring into production.
The company aims to operate Geronggang at 20,000 tonnes/month. Both mines will produce coal for domestic and export use. Jatenergy will further review Sebuku for potential opening and exploitation.
The Jongkang I and Jongkang II projects are in production. They produced around 35,000 tonnes over the past year and were developed in December 2011 as part of a JV arrangement with a local Indonesian partner.
Located in East Kalimantan about 5km along an existing haul road from the Mahakam River and 25km from a major Indonesia coal industry hub at Samarinda, each concession is covered by a licence comprising 100 hectares.
Transport infrastructure can handle more than 20,000 tonnes/month, subject to weather conditions. Upon the investment receipt, Jatenergy will move to operate the Jongkang project at increased capacity.
For Jatenergy, the third party investment allays risk while boosting short term coal production and bringing forward cash flows. In addition, Jatenergy is due to receive $1.8 million by December 17 from the sale of the Coal Soil Brik project.