The development of LG International Corp’s second coal mine in Indonesia is another step towards the company becoming a major natural resources developer in Asia. The company, which is the trading unit of South Korea’s LG Group, plans to start commercial production in January.

LG held a ceremony in late September to mark the beginning of pilot production at the open pit GAM coal mine in East Kalimantan. Commercial production will begin at an annual rate of 3 million tonnes and be gradually ramped up to as much as 14 million tonnes.

The mine covers around 106sqkm and is estimated to hold about 220 million tonnes. LG acquired a 60% stake of GAM in 2012 and has operational rights. It has signed supply contracts with utility and other businesses in India, China and other Asian countries.

A company spokesman said the mine was just 60km away from a port with many other mines in Kalimantan up to 300km from the coast, which gave LG the upper hand in costs over many of its rivals.

He said, “For the past four years, we have been working hard to develop the GAM mine. We had to deal with local residents, obtain approval from the Indonesian government, and build logistics and production infrastructure. We are delighted to be able to finally begin production.”

“Many South East Asian nations are building coal-fired power plants to meet surging electricity demand in line with the rapid economic growth. The demand for goal will continue to grow, creating business opportunities for us. We will continue to secure more mining rights in Indonesia and other countries to become a major natural resources developer in Asia.”

LG acquired the MPP mine, also on Kalimantan, in 2007 and has since been producing 3 million tonnes of coal annually.