Straits said Sebuku was developing a highwall for mud stabilisation to provide access to reserves pending the decision on the operation’s forest boundary.

The mine was 26.25% down in coal production in the three-month period, compared to the December quarter.

Exploration will continue throughout the year with a focus on the Kanibungan pit and in the Sebuku Strait.

By contrast, the company’s Jembayan coal mine was just over 5% down, with Straits still continuing a drilling program at the operation.

Total coal sales from the two mines fell 21.37% to 1.65Mt for the March quarter, compared to the previous three months.

Over at its 35%-owned Madagascan coal project, six holes have been drilled so far in the current exploration program.

Straits said initial indications suggested a washed coal could be produced at 6000kilocalories/kg with 15% ash and less than 1% sulfur.

Straits ended March with a $US315 million cash position.

This will be bolstered by this week’s sale of the company’s 60% stake in Straits Bulk & Industrial to Asian energy major PTT Group for up to $US335 million, with $220 million received up-front.

Shares in Straits Resources are up A1c to $1.53 this morning.