Reuters Indonesia orders temporary halt at Bayan coal mine

Indonesia orders temporary halt at Bayan coal mine
JAKARTA, March 20 (Reuters) - Indonesia has ordered a coal mining unit of PT Bayan Resources (BYAN.JK) to temporarily stop production for operating outside approved areas, a government official said on Friday.

PT Teguh Sinar Abadi, which operates a coal mine in East Kalimantan, had operated in areas outside those approved by the government in its feasibility study, said MS Marpaung, director of engineering and environmental at the energy and mines ministry.

"The firm has to make a new feasibility study when exploring a new block," Marpaung said.

"We ordered them to temporarily stop production and to fix the problem before resuming operations," he said, adding the ministry has sent the letter to inform the company.

Teguh Sinar Abadi started operations in 2008 and it is expected to produce 1 million tonnes of coal this year, Bayan said previously in a presentation to investors.

Jenny Quantero, Bayan's corporate secretary, said the company was not aware of an order to temporarily halt production.

"We haven't heard about it. We need to check it first," Quantero said.

Bayan, Indonesia's eighth-largest coal producer, plans to produce 9.5 million tonnes of coal this year, up 56 percent from an estimated 6.1 million tonnes in 2008, it said.

The firm has eight mining companies with total concession areas of 81,265 hectares (200,800 acres).

The firm expects to sell 10 million tonnes of coal this year, up from 6.7 million tonnes in 2008. It said that demand remained strong and that all coal sales volumes were fully committed.

Source: Reuters (20 Mar 2009)