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Geo Energy signs US$500m overburden removal deal with Indonesian miner
GEO Energy Resources Limited announced it has signed an agreement worth US$500 million with fellow Indonesian miner PT Bukit Makmur Mandiri Utama, or BUMA, for the provision of overburden removal at the group's PT Tanah Bumbu Resources (TBR) coal mine.
The agreement will be for the entire life of the mine, or until all the coal reserves have been fully extracted from the TBR mining area.
Preparation and overburden removal will commence sometime in March 2018.
Overburden is defined as the rock or soil overlying a mineral deposit, which must first be removed to gain access to the deposit below.
The TBR coal mine, located in South Kalimantan province, is expected to commence production in the second quarter of 2018.
BUMA, Geo Energy said, generally undertakes all the mining operations including land clearing and overburden removal as a mining services provider.
The two companies have worked together before on Geo Energy's PT Sungai Danau Jaya (SDJ) mining concession since June 2015, where BUMA has "consistently achieved the production targets set" since SDJ commenced production in December 2015.
Tung Kum Hon, chief executive of Geo Energy, said the companies were also in advanced discussions to finalise the coal offtake for the TBR mine, and will make an announcement at the right time.
Geo Energy's shares were trading up 4.55 per cent, closing at 23 Singapore cents, before the announcement was made.