The joint venture will own and manage the shallow river barges and tugs on the Barito River, specifically designed for Cokal’s PT Bumi Barito Mineral (BBM) project.

The 50:50 JV is an accumulation of almost two years of studies into river-based shallow draft barging systems. The systems have not been used in Indonesia, but the companies’ research has proven them to be effective for BBM.

The 15,000 hectare BBM project is located in Central Kalimantan and has a JORC resource of 77 million tonnes comprised of 70Mt inferred and 7Mt indicated. The project is located on the Barito River, a major coal barging hub.

MDM will operate the river barges and supply chain under the agreement. According to Cokal, they have provided invaluable input and practical knowledge during the research phase of the river barging solution.

Cokal chairman and CEO Peter Lynch said MDM was part of the Meratus Group, which has operated in Indonesian shipping since 1957. It has provided barging and shipping services to a number of the major Kalimantan coal operations.

“This strategic partnership enables MDM to bring the experience and knowhow necessary to ensure the success of river barging on the Barito River, and for Cokal to be a part of controlling the critical part of its supply chain,” Lynch said in a statement.

“This is a significant achievement for Cokal as we draw closer to the commencement of our coking coal production in mid-2014.

US Naval Architects has been retained to do detailed design for contract tenders scheduled to be completed in the third quarter.

Cokal is completing definitive studies and obtaining the necessary approvals for BBM, with the aim of starting construction in October and first production in H1 2014.

Cokal has interests in five projects in Central Kalimantan and one project in West Kalimantan, all prospective for metallurgical coal.