Indonesia currently consumes around 20 million tonnes of steel per annum while at the same time only produces about 5Mtpa locally, he said in the company’s annual report.

“Major steel producers recently announced plans to further develop hot metal and rolling capacity in Indonesia.

“This reflects the growing confidence in investment sentiment as the potential of Indonesia’s competitive manufacturing base and potentially large growth economy is realised.

“The population of 250 million makes it the fourth largest in the world, with a fast-growing middle class and a highly aspirational young demographic.”

Lynch said Cokal has been focused on progressing its 60% owned BBM coal project in Central Kalimantan towards production.

Following the pre-feasibility study which was completed in October 2012, a major exploration program was undertaken to further define coal resources discovered in the western KLM area of the BBM lease.

Recently completed, this program resulted in a major upgrade of the BBM resources.

In October 2013 an upgraded total coal resource of 261Mt was announced, including 10.5Mt of measured, 13.5Mt indicated and 237Mt inferred resources.

In parallel with the completion of the drilling program, a definitive feasibility study was undertaken based on the 2Mtpa open cut project identified in the pre-feasibility study.