Realm said that following the recent completion of the feasibility study, the company was making grounds with securing off-take partners and advancing the final stages of permitting.
The feasibility study found Realm to be shaping up as a simple, open cut operation that would supply low-ash and low-sulphur coal ideally suited for modern Indian and Chinese power generation.
Realm holds 51% ownership of the project, which is expected to produce 2.5Mtpa to 3Mtpa for a mine life of 15 years.
Katingan Ria is Realm’s first coal project. It announced in March that it had established maiden JORC-compliant reserves of 29 million tons.
Since the feasibility study’s completion, Realm has been pursuing talks with potential strategic partners and working towards receiving its final permit.
“We are encouraged by recent progress at Katingan Ria, coinciding with the gradual strengthening of regional markets for its coal product,” chairman Richard Rossiter said.
“Together with our partners, we remain committed to bringing Katingan Ria on stream as a simple, low cost, 2.5Mtpa operation in the near term”
Indonesian state-owned electricity corporation PLN has issued a request for proposal for construction and operation of two 100MW power stations near Kasongan, around 135km from the project.
Bids are due in Q3 2013 and coal supply would be expected by 2016/2017.
Realm said it was in discussions with several of PLN’s invitees as well as other potential strategic and off-take partners.
Realm also said it remained confident about its coal sales and prices, stating that “Indonesian supply has continued to grow strongly despite the decline in thermal coal prices.”
“Recently, prices for 4,200 kcal gross as received coal have risen to around US$43/t. While this is below the assumed long term forecast of US$52/t, the price is above the forecast project base case FOB cash cost, particularly in the early lower cost years,” Realm said.
Finally, the company said it was close to receiving all necessary permits after a “longer than initially forecast” permitting phase.
The last remaining forestry permit is on track for the second half of the year and once granted, Katingan Ria “is essentially permitted for coal mining operations and production.”