The company said the lease was another major milestone in the mine’s goal to be in production by the first half of next year.

“This now completes the mining approvals required for BBM production and places the company in a very sound position to start construction of the project before the end of the year,” Cokal executive chairman Peter Lynch said.

The production mining lease covers an area of 15,000 hectares, which is the maximum coal lease allowable in the area, with exploration permitted over the whole lease area and full development permitted in what the company calls “the eastern block” of BBM.

The lease covers a total term of 40 years, if two 10-year extensions are permitted following an initial 20-year period.

The company is now focused on upgrading the forestry exploration permit to a production permit. This is scheduled to be completed by the end of third quarter 2013, and will alow the mine to move into construction.

“Cokal expects to be barging coal down the Barito River and delivering a premium coking coal to the nearby Asian steel markets by the first half 2014,” the company said in a statement.

Coking coal from the BBM project is expected to be a low ash, low sulphur, ultra-low phosphorus product with a coking swell index of 9.

Cokal is pursing the full development of the eastern block of the BBM project consistent with it’s Prefeasibility Study (PFS) which envisages development of the BBM project in two stages, an initial 2 Mtpa direct ship operation with an expansion to up to 6 Mtpa at a later stage.

The PFS highlighted the potential for BBM to be developed as a low cost metallurgical coal project.

Cokal also said negotiations were underway with the critical contractors and suppliers for the project, and the granting of the approval process now gives the company the security to seek funding opportunities, preferably direct investment and off-take funding direct into the BBM project.