White Energy to face Bayan in court

WHITE Energy is set for a pre-trial conference in Singapore on February 7 in Singapore over a dispute with its former JV partner Bayan over the coal upgrading plant at Bayan’s Tabang mine in East Kalimantan, Indonesia.
White Energy to face Bayan in court White Energy to face Bayan in court White Energy to face Bayan in court White Energy to face Bayan in court White Energy to face Bayan in court

White Energy's Binderless Coal Briquetting process.

Lou Caruana

This follows a decision on December 27 last year by White Energy’s wholly owned subsidiaries, BCBC Singapore and Binderless Coal Briquetting, to commence legal proceedings in the High Court of Singapore against Bayan.

The issues in the legal proceedings include a claim by BCBCS against Bayan for damages for breach of the joint venture deed between the Kaltim Supocal (KSC) shareholders, including the obligation to supply coal to KSC and the obligation to provide funding to KSC.

“The purpose of the [February 7] hearing is for the court to monitor the progress of the legal proceedings and give directions as required to ensure that the legal proceedings are progressing expeditiously,” the company said.

“As a result of the above legal dispute, KSC suspended operations at the Tabang plant in late November 2011.

“The Tabang site has since been placed on care and maintenance program, with around 15 staff remaining on site who are responsible for the safeguarding of KSC’s assets.

“They are being supported by a small number of administrative staff in KSC’s Balikpapan office. All other staff were terminated in late December 2011.”

At the time of suspension of operations at Tabang, the various plant modification works being undertaken at site were around 95% complete.

The dispute started in November after Bayan requested that White purchase Bayan’s share of KSC for $US45 million.

At the time White dismissed this request informing Bayan it was in breach of its obligations under the JV agreement.

This prompted discussions between senior representatives of the two companies regarding the future of the project and the joint venture agreement.

Following the discussions, White Energy said no resolution on the project had been identified and the companies were unable to reach an agreement on commercial terms relating to the ongoing supply of coal by Bayan to KSC.