Metalnewsnet 7 May ：

ASX listed coal producer Kangaroo Resources has secured an initial export sales contract for coal from the company’s operating coal projects located at East Kalimantan in Indonesia.

The agreement which has been signed with a large Chinese energy company, Guandong Yudean Farnon Investment Co Ltd involves the provision of three trial shipments containing a total of 150,000 tonnes of coal over a two month period.

Upon successful completion of these shipments, Kangaroo Resources intends to extend this agreement to cover additional tonnages of coal.

The company said the price negotiated for the coal is very competitive and is based on a formula reflecting fluctuation of the Chinese Coal Index.

This represents significantly better value than pricing taken from the local Indonesian market and will provide KRL with a valuable income stream as it continues to ramp-up production from its Indonesian coal portfolio.

Importantly, the agreement is non exclusive, with Kangaroo Resources able to consider other off take partners. With this in mind, the company is continuing in its discussions with other potential partners to further promote the company’s long term strategic objectives.

Mr Mark O’Keeffe MD of Kangaroo Resources said that the signing of the export sales contract was a milestone event for the company which would provide valuable revenue as well as an entry to the Chinese export market. He said that “This initial sales contract with Yudean Farnon provides a strong foundation from which we can continue to ramp up the mining and export of coal from our operations in Kalimantan in Indonesia."

He added that “We are also very pleased to be associated with an organization of the size and prestige of Yudean Farnon, which gives us an important foothold in the dominant Chinese market.
We are confident that this deal will be very successful and we look forward to a long and mutually beneficial relationship with Yudean Farnon.”

Mr Chen MD of Yudean Farnon stated that “Kangaroo Resources Ltd represents a dynamic young company that has significant coal assets in Indonesia."

Mr Chen said that "Yudean Farnon is delighted to start a relationship with KRL and it hopes that the partnership will continue to grow as KRL builds its production ramp up.”

( from Proactive Investors)