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Kaltim Prima Coal Mine, Indonesia

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Key Data
Producer of Coal
Location Eastern Kalimantan, Indonesia
Ownership PT Bumi Resources (100%);
Government of Indonesia has a 13.5%
royalty share
Geology type Miocene (Recent) coal measures
Mineral type High-volatile bituminous steam coal
Reserve base 786Mt proven, plus 3,700Mt measured
and indicated (2005)
Annual 36Mt/yr target
production
Full specifications

Kaltim Prima, one of the new generation of Indonesian thermal coal

producers, is located in north-eastern Kalimantan. It is operated by PT
Kaltim Prima Coal (KPC), which from the project's inception up to late
2003 was jointly owned by BP and Rio Tinto. The Indonesian
government receives a royalty equivalent to 13.5% of the revenue. The
operation is self-contained and employs some 2,700 people.

Although BP and Rio Tinto's Contract of Work required the companies

to divest part of their holding to local interests, up until 2003 no
Indonesian purchaser was able to raise the finance needed to buy them
out.
Expand Image
"PT Bumi is planning further expansion to 30Mt/yr, plus the Kaltim Prima is one of the major export
development of the Bengalon reserve, some 25km from the existing coal mines developed in Kalimantan,
Sangatta operations." Indonesia, over the last ten years.

In mid-2003, the companies announced the sale of their holdings in

KPC to PT Bumi Resources for a cash price of $500m, including
assumed debt. PT Bumi Resources already owned PT Arutmin
Indonesia, another major Indonesian coal producer, and has interests in
oil, natural gas and mining, amongst other commercial sectors.

In 2006, PT Bumi announced the sale of all its coal holdings to PT

Borneo Lumbung Energi for $3.2bn. However, the deal subsequently
failed, although PT Bumi later indicated that it still intends to divest a
proportion of its holdings.

PROJECT DEVELOPMENT

BP and CRA (now Rio Tinto) successfully tendered for a 7,900km²

licence area in eastern Kalimantan in 1978. Exploration from 1982–86
indicated reserves of 112Mt of export-quality thermal coal.
Construction began in 1989 and the mine was commissioned in 1991 as Expand Image
a 7Mt/y operation at a cost of $570m. Thick, regular seams make for
straightforward mining conditions.
The mine has subsequently been expanded, with a sales target of
20Mt/yr by 2005. PT Bumi is planning further expansion to 30Mt/yr,
plus the development of the Bengalon reserve, some 25km from the
existing Sangatta operations.
In mid-2004, PT Bumi awarded the Australian contractor, Henry
Walker Eltin, a $1.2bn, ten-year contract for infrastructure development
and mining services at Bengalon, which will have a 6Mt/yr initial
capacity.

GEOLOGY AND COAL QUALITY

Pressure and heat associated with an igneous intrusion has increased the Expand Image
rank at Kaltim Prima to high-volatile bituminous coal. A total of 13 One of the mine’s Hitachi hydraulic
seams range in thickness from 1m to 15m; typically in the range of excavators, working with Cat hauler.
2.4m to 6.5m. Seam dips vary from 3° to 20° at the outcrop. The seams
are very clean in terms of mineral matter and sulphur and, at 4–8% in
some areas, the in-situ moisture content is low.

As of the end of 2005, PT Bumi cited reserves at Sangatta at 621Mt,

plus 165Mt at Bengalon. The company also has measured and indicated
resources of some 3,700Mt.

As of mid-2004, PT Bumi cited reserves at Sangatta at 462Mt, plus

157Mt at Bengalon. The company also has measured and indicated
resources of some 2,200Mt.

The operation produces two main export products. Prima Coal is a high-
volatile bituminous steam coal with high calorific value, very low ash,
low sulphur and low total moisture. Pinang Coal is similar but has a
higher moisture content. Quality parameters are: Expand Image
Kaltim Prima has six Liebherr R996
Product Prima Coal Pinang Coal Litronic excavators, used with Cat 789B
Moisture (total) 9.5% 14% haulers for overburden removal.
Ash 4% 6%
Volatiles 39% 39%
Fixed carbon 52% 46%
Total sulphur 0.5% 0.5%
Heating value (adb) 30.1MJ/kg 27.6MJ/kg
Heating value (gar) 28.5MJ/kg 26.0MJ/kg
adb = air-dried basis
gar = gross, as received

KPC blends run-of-mine coal from its various pits to ensure product
consistency.

As of end-2001, Kaltim Prima had mineable reserves totalling 462Mt,

plus measured and indicated resources of nearly 2,200Mt.
Expand Image
MINING TECHNOLOGY Five of the mine’s fleet of Caterpillar 789B
haulers. Truck scheduling is carried out
KPC operates six to 12 individual open pits at any time, the average using a Mincom dispatch and management
stripping ratio being 7.5bcm (bank cubic metres) of overburden per system, based on a global positioning system
tonne of coal. The overburden material degrades quickly on exposure to (GPS) to locate and track individual vehicle
the atmosphere and generally provides easy digging. movements.

Some overburden rock requires blasting to ensure adequate

fragmentation for the shovels. KPC carries out its own mining in most
of the pits, but also contracts out a smaller proportion of its mining
requirements.

"With selective mining, over 90% of the run-of-mine coal only needs
crushing and blending to give export-quality Prima Coal."
The mine's loading fleet consists of over 20 large hydraulic shovels and
backhoes with bucket capacities of up to 34m³. Leading suppliers
include Hitachi, with nine EX3500 machines and six EX1800s, and
Liebherr, which has six R996 Litronic shovels/backhoes on site.

Overburden haulage involves a fleet of 137 trucks, including Caterpillar

785s and 789Bs with capacities of 135–185t, Cat 777s (85t) and
Komatsu HD785s (also 85t). Truck scheduling is carried out using a
GPS-based Mincom dispatch and management system.
COAL PROCESSING
Expand Image
A luffing and slewing stacker (foreground)
and a bucket-wheel stacker-reclaimer
(behind) at Kaltim Prima’s port stockpile.

With selective mining, over 90% of the run-of-mine coal only needs
crushing and blending to give export-quality Prima Coal. Coal from the
seam roofs and floors contains more mineral material, and so has to be
washed. This 'dirty Prima' and Pinang material is handled separately
from the 'clean Prima', with individual streams for the different raw
materials.

After crushing to –50mm in Gundlach rolls crushers, the washing plant

uses dense medium cyclones for 0.5mm to 50mm feed, and spirals for
the –0.5mm material, products being dewatered in centrifuges before
blending into the Prima Coal stockpile.

OVERLAND TO THE PORT

The mine site contains separate stockpiles for the Prima and Pinang
products, holding 60,000t and 35,000t respectively. Coal is reclaimed
and transported by a 13km-long, 2,100t/h-capacity overland conveyor to
Kaltim Prima’s dedicated port facilities at Tanjung Bara. Expand Image
One of the two quadrant shiploaders which
Further stockpiles hold a live capacity of 350,000t of Prima and together can load bulk carriers of up to
150,000t of Pinang coals. Coal is transferred directly from mine to ship 180,000dwt at 4,200t/h.
whenever possible.

Vessels of up to 220,000dwt can be handled by the port, with loading

facilities at the end of a 2km-long jetty. Twin quadrant loaders can each
handle up to 4,700t/h, the normal loading throughput.

PRODUCTION

Since production began in 1992, Kaltim Prima has increased its output
year-on-year, from 7.3Mt in its first year to some 17Mt in 2002 and
2003. PT Bumi is now expanding the Sangatta operation to 30Mt/yr,
with a further 6Mt/yr to come from Bengalon.

The operation produced 27.6Mt in 2005, with a target for 2006 of 36Mt
of coal and some 700Mt of overburden.

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