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Cokal signs MOU to supply PCI coal to Indonesian PT Karkatau Steel

Steel News - Published on Thu, 23 Aug 2018

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Proactive Investor reported that Cokal Ltd has signed a memorandum of understanding to supply PCI coal to Indonesia’s largest steel maker Krakatau National Resources (KNR), a subsidiary of PT Krakatau Steel. The agreement was made by Cokal’s 60%-owned Indonesian company PT Bumi Barito Minerals (PT BBM), which holds the Bumi Barito Mineral (BBM) Coal Project in Kalimantan. The MOU also specifies that KNR personnel will assess BBM’s operations, while Cokal personnel will assess the Krakatau steel mill processing and utilisation of metallurgical coal.

Cokal views the agreement as a path to establishing a long-term contract to supply metallurgical coal products to the Indonesian steel industry, which is currently supplied by Australian and Russian sources.

Cokal chief financial officer Teuku Juliansyah said the agreement was a significant milestone in conducting a successful mining business in Indonesia. He said “Cokal and KNR have been pre-emptive in satisfying Indonesian regulatory requirements. This includes] the supply of coal for the domestic market obligation (DMO) decree, as well as the regulation to value-add to minerals within the country.”

Agreement pre-empts government requirements. BBM does not have a DMO for its metallurgical coal products, however, the MOU pre-empts a DMO directive from the Indonesian government. Processing of BBM’s coal in the steel mill fulfils a further requirement of the Indonesian government that raw minerals be processed in-country.

Indonesia’s Ministry of Energy and Mineral Resources issued a new regulation in 2009 that prioritised mineral and coal resources for domestic usage. The regulation requires coal and mineral producing companies to allocate a certain minimum percentage of its total production to the domestic market.

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Posted By : Rabi Wangkhem on Thu, 23 Aug 2018
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