PHI Group to sign joint operation agreement with Indonesian coal company

PHI Group Inc. on Jan. 10, 2012, said that it has signed a letter of intent with Indonesian company PT. HBP to jointly operate a producing coal mine with operation and production license in South Kalimantan, Indonesia.

Under the terms of LOI, the companies will sign a definitive operation agreement to jointly produce and process thermal coal from an already producing mine with about 5,500,000 metric tonnes of mineable coal deposits of calorific value range 5,900-6,500 Kcal/Kg in an area of 80.6 hectares located in Jombang, Satui, Tanah Bumbu , South Kalimantan Province, Indonesia.

The companies expect to finalize the terms and conditions of the joint operation agreement in January 2012 or shortly thereafter following additional satisfactory due diligence review by the company.

The transaction is part of PHI Group’s plan to cooperate with currently producing mines to generate current revenues for the company through joint operation and coal trading. Subject to operational and financial conditions, the company expects the joint operation with HBP to produce about 50,000 metric tonnes of coal a month and have a significant positive impact on the company’s financial results.

“While we continue to accumulate energy and natural resource assets in Southeast Asia, partner with coal-fired power plants and introduce advanced clean coal combustion technology to existing and new plants, we believe our activities in the area of joint operation and coal trading with already producing mines will enable the company to generate current revenues and profitability, which will also help our overall long-term objectives,” PHI Group Chairman Henry Fahman said.