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Coal prospects The Indonesian coal boom Over the past five years Indonesia's export coal production has soared from about 55 million tonnes per annum to around 150Mtpa. It is predicted that Indonesian coal production will double by 2017 to at least 400 million tonnes, most of which will be exported. Kalimantan is already home to approximately 20 large scale coal mines, the biggest of which is Kaltim Prima Coal, owned by Bumi Resources, which produces approximately 35Mtpa of coal from a current resource of 4.5Bt. Notable new discoveries in recent times include the Pakar discovery in East Kutai, which has a substantial JORC-compliant resource of 3.3 billion tonnes of thermal coal. Churchill Mining is also active in the region having acquired a 75% interest in the East Kutai Coal Project where it has already established a sizeable resource. Current KLG activity KLG is currently carrying out due diligence on five coal concessions (KP's) offering exploration and development potential in East Kalimantan. KLG has signed an Option Agreement to acquire a 75% in the concessions and is actively working with partners to acquire interests in additional concessions in the area.  KGC signed an Option Agreement in April 2008 to acquire a 75% stake in the concessions and establish a presence in Indonesia's rapidly growing coal industry. East Kalimantan is responsible for around 60% of Indonesia's coal production and all the concessions are close to existing coal mining operations in what has become a world hot spot for coal. The six month due diligence period will include a minimum of 3,000 metres of drilling to assess the potential for coal reserves.  VP Exploration Mansur Geiger (left) and CEO Rahman Connelly get their hands on the evidence at a Mandul coal seam As part of the due diligence, KLG is working closely with the Indonesian consulting group PT GMT Indonesia and the Mesra Group. GMT manages a number of coal exploration projects in East Kalimantan and has extensive experience in bulk commodity exploration, consulting and project management. GMT is contracted to produce a detailed report on each of the concessions. The Mesra Group is an established operator in the coal market, having identified and sold substantial coal projects to Korean, Indian and Middle Eastern companies.  Mansur Geiger and Rahman Connelly meet members of the local community close to the Mandul concession
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