The contract will commence on January 1 and includes the removal of up to 90 million BCM of overburden, designed to underpin the ramp up of production from its Mamahak mine.

The mine is currently producing approximately 0.25 million tonnes per annum of coking coal.

Kangaroo said the new mining contract would cement the transition of Mamahak from small scale mining operations seen to date to full scale production.

As part of the contract, an upgrade of the existing haul road is planned with work scheduled to start mid next year, which will be completed by the end of 2012.

The contractor will commence mobilisation of equipment in December, including overburden and coal equipment which will continue throughout the year.

Kangaroo’s managing director Mark O’Keefe said: “We are pleased to have secured the future growth of the Mamahak project through our partnership with PT Putra Perkasa Abadi.”

“The Mamahak Project contains coking quality coal deposits which are consistent with our strategy of providing an even broader spectrum of coal products to the market.”

To date, Kangaroo has planned a stage one exploration drilling program at Mamahak, and the company is seeking a drilling contractor to mobilise to site.

The exploration program, which will continue throughout 2012, is designed to define a coal reserve at Mamahak.