Jatenergy (ASX: JAT) is of the view that renewable energy will become increasingly mainstream over the next decade, but that conventional energy sources will continue to play an important role. Jatenergy's mission is to be an important player in both coal and the production of renewable biofuels.
Jatenergy to mine first coal under new Indonesian joint venture
Jatenergy (ASX: JAT) will mine its first coal this week, after entering a joint venture with a currently producing coal mine, Jongkang II in East Kalimantan, Indonesia.
The company expects its first sales of high quality thermal coal to Asian customers to occur this year.
Joint venture partner CV Karya Putru Bersama has already sold about 40,000 tonnes of coal from Jongkang II.
This milestone realises Jatenergy’s goal of diversifying its energy business.
Jongkang II is Jatenergy’s third joint venture agreement in East Kalimantan, but the first to enter production, with partnerships for the Jongkang and Atan Bara projects.
Jongkang and Atan Bara are both considered to be “short to production”, and Jatenergy expects to follow up in the near future with development of the two projects, once production licences are granted.
Under the latest agreement, Jatenergy is required to provide working capital in order to earn 30% of the net margin of the coal, as well as to undertake full marketing and sales rights to the coal.
Cash flows from these projects will be used to advance the evaluation and eventual development of the company’s showcase Katingan coal project in Central Kalimantan.
In addition to its Indonesian operations, Jatenergy recently executed binding agreements to purchase eight coal exploration permits and permit applications in Queensland’s Bowen and Galilee Basins.
