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Wednesday, 13 January 10
KANGAROO RESOURCES KICKS OFF INDONESIAN COAL PRODUCTION


Coal-focused company Kangaroo Resources has formally joined the ranks of international coal operators after wrapping up the delivery and sale of the first thermal coal products in Indonesia.

The company has delivered its first 4,200 tonne coal to the Cahaya Fajar Kaltim power station in East Kalimantan on schedule, achieving the first operations objective within its extensive portfolio of thermal and coking coal projects on schedule.

It has sold this coal as part of a competitive tender process whereby established to supply greater volumes of coal in months ahead as the ramping of the GPK Project accelerates. Kangaroo will be working to provide a consistent supply of thermal coal into this tender over the term of the contract.

During the morning trade, shares in Kangaroo jumped 1.5c, or 7.1%, to 22.5c.

Indonesian coal production has increased in recent years, with the country currently the world's third largest exporter of steaming coal after Australia and China. According to the 2008 BP Statistical Energy Survey, Indonesia had end 2007 coal reserves of 4328 million tonnes.

Kangaroo chairman Mark O'Keefe said achieving the first coal delivery and sale within the very tight deadline was an exceptional achievement.

"The next step for the company is to review its operational to realise efficiences and greater margin, while at the same time continuing to ramp up production from the GPK Project to achieve our production targets and progress the Mamahak Project into full-scale production," Mr O'Keefe said.

"This marks the achievement of another significant milestone for the company."

The GPK Project is targeted to produce up to 100,000 tonnes of thermal coal per month by early 2011 and ultimately up to 3-4 million tonnes per annum  by 2012. The development of site infrastructure is progressing to allow effective increase in production to meet the scheduled operation targets and will continue throughout the first half of 2010.

Mr O'Keefe said the company's budgeted operating margins on GPK coal sales were consistent with the current sale tender and the Company will be working to realise efficiences in all aspects of the operations in order to maintain or increase this margin.

The commencement of coal operations at GPK represents the first key milestone in the company's production strategy, which is based on achieving production from 2-3 projects this year. To read more  Proactive Investors



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