KAL Energy Inc. is pleased to announce that in excess of 2,000 meters of drilling have been completed on Phase 1 of the $2 million 5,000+ meter work program on its Thermal Coal Project in East Kalimantan, Indonesia. This program includes extensive drilling, trenching, sampling and mapping of known geological structures, and exploration for unknown structures.
This ongoing program is located in KAL's concessions in East Kalimantan, Indonesia - a region noted for its vast supply of thermal coal.
"After drilling more than 140 holes across the area of the known seams, we are confident that the estimates of our geological team have been borne out by the drilling. We can confirm that the initially reported seam of 4.5 meters extends over a considerable area," stated Cameron Reynolds, Kal Energy's CEO.
The drill program currently taking place on KAL Energy's concession in Indonesia is being conducted to determine the amount and quality of coal available. Geological estimates have indicated that in excess of 192 million tons of coal with low sulfur and ash content are located at shallow depths on the concessions. As neighboring coal concessions have exhibited larger reserves of coal than their prior estimates, KAL Energy may be able to discover a greater quantity of coal reserves available on their properties.
Laboratory testing presently being undertaken on samples from the concession will indicate the calorific value as well as the ash and sulfur content of the coal located on KAL's concessions. As the calorific value of coal represents the amount of potential energy stored in coal, higher values command higher prices for exported thermal coal, especially when combined with low sulfur and low ash content.
"We have undertaken a large amount of drilling on the known structures and expect lab analysis results within 2 weeks", added Reynolds.
Indonesia recently surpassed Australia as the world's leading power station coal supplier. Additionally, coal exports from this region have been increasing due to increased demand. This increased demand is partially caused by China's decision to cut its coal exports due to its increased domestic use. There is also increased demand from markets such as India, who has increased coal imports due to weakened domestic production, India is also planning to have a number of new coal-fired power generation facilities up and running by 2009. With one of the world's largest thermal coal exporters Kaltim Prima Coal (KPC) expected to produce 45 million tons of coal this year, as its neighbor, KAL energy's concessions are in a region that is known for its extensive open pit thermal coal producing mines. -- www.cnxmarketlink.com
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