Churchill's EKCP licences under threat

Exploration & Development

Publishing Date: 03 Mar 2011 4:14pm GMT
Author: Mining Journal

Churchill Mining plc's East Kutai coal project (EKCP) in East Kalimantan, Indonesia, is under threat. A State Administrative Tribunal in Samarinda has upheld a decision made last September by the Regent of East Kutai to cancel the four mining licences that comprise EKCP.

According to a feasibility study published less than six month's ago, Churchill's 75%-owned thermal-coal project in Indonesia could support a 30Mt/y operation over at least 25 years. Resources within the project were estimated to contain an overall 2,730Mt of coal.

Indonesian company Ridlatama Group holds the remaining 25% interest in the project.

Churchill is evaluating its options, but said the decision "is not final", and the proceedings "do not constitute an action that will immediately affect the legal rights of the owners of the EKCP licences". In particular, the company noted that the Administrative Tribunal "is supposed to rule strictly on matters of process".

The Regent apparently took the decision after receiving complaints from residents that the company had carried out mining activities in forestry areas.