Wednesday, January 25, 2012

Weekly news summary

Golden Peaks Resources Ltd. Announces Name Change to Reliance Resources Limited

Source : Press Release, Monday, 09 January 2012

Golden Peaks Resources Ltd. (TSX: GL) (the "Company") is pleased to announce that it has changed its name to Reliance Resources Limited. The shareholders of the Company approved the name change at the Company's Annual and Special Meeting held on November 17, 2011. Subject to the Toronto Stock Exchange's (the "Exchange") acceptance, the common shares of the Company will commence trading on the Exchange under the new name and ticker symbol "RI" at the opening of business on Thursday, January 12, 2012.

The name change aligns the Company and its operating subsidiaries in three continents under the Reliance Brand.

Holders of the Company's share and warrant certificates do not need to take any action as a result of the name change.

The Company has a portfolio of five mineral tenements covering 68,000 acres on the islands of Sulawesi and Halmahera in East Indonesia. The projects offer both exploration potential and an existing resource base. All five projects are adjacent to or along strike from operating gold mines or identified gold resources with similar geology and structural feature. Importantly, all projects have been converted to IUP tenements as required under the new Indonesian Mining Act (2009).

The Company is active on four of its five Indonesian gold projects; currently drilling on the Tanoyan Gold Project and conducting surface exploration programs on the Palopo Gold Project, the Kapa Kapa Gold Project and the Roko Gold Project. All of the projects have easy access via paved and/or gravel roads and the regional infrastructure is good.

NALCO to Finalise Coal Supplier for Indonesian Project in February

Source : Economic Times, Sunday, 15 January 2012

State-run NALCO is set to finalise a deal with a miner by next month for supply of coal to its $ 3.8 billion aluminium-cum-power project in Indonesia.

"We are looking at a coal mine basically to provide coal to our power and smelter project there (Indonesia). We need 5 MTPA for 25 years. We have zeroed in on one of the five proposals and the Board will take a final decision on it by the end of next month," NALCO CMD B L Bagra told PTI.

The aluminium major has plans to set up a 5-MTPA aluminium smelter and a 1,250-MW power plant in Indonesia entailing $ 3.8 billion (about Rs 18,000 crore) investment.

The coal mines shortlisted have reserves of about 200 million tonnes (MT), Bagra said.

Sources said the company has zeroed in on Muara Enim mine in the East Kalimantan district of Indonesia.

Bagra said five coal miners had responded to NALCO's bid seeking sourcing of coal for its project, and two of them had fulfilled the criteria.

The five firms included MEC Middle East, Pram Dwi Jaya Muara Enim and Bumi Muara Prasada.

There is no dearth of financial resources for it as the company has surplus reserves and there was no debt liability, the CMD said.

"We have Rs 4,500 crore cash balance. There is no debt liability. We have investment plans lined up for next three-four years. Our investment requirement for 2012-13 is to the tune of Rs 2,200 crore," he said.

The Indonesia project will be managed through a special purpose vehicle (SPV), in which the aluminium major will have a controlling stake.

Indonesia Seeks Higher Royalty from U.S. Mining Firm

Source : Xinhua, Monday, 16 January 2012

The government would seek a 3- percent royalty from gold exploited by U.S.-based gold and copper mining firm Freeport McMoran in Indonesia's Papua, a senior Indonesian official said Monday.

Energy and Natural Resources Deputy Minister Widjajono Partowidagdo said that a legal basis to back the government's claim for higher royalties from Freeport is being drafted at the moment.

"We expect that the legal basis would be completed in the near future so as to make the negotiation with Freeport settled as soon as possible," Widjajono said on the sidelines of a hearing session with lawmakers here.

He said that on the legal basis endorsed by the president, the government would ask Freeport to raise the royalty of gold it exploited from Papua from the present 1 percent to 3 percent.

He said that President Susilo Bambang Yudhoyono has set up a team, led by Coordinating Minister for Economy Hatta Radjasa, to re-negotiate the Freeport's mineral exploitation contract signed during the administration of former President Suharto.

The team is tasked to evaluate the clauses of contracts established by Freeport and the previous administration.

The royalty for Indonesia was considered lower than it is provided by Freeport in its mining operations in other countries.

Freeport provides 6 percent and 5 percent for copper and gold in other countries, reports said. In Indonesia, the U.S. mining firm gives 1 percent for gold and up to 3.5 percent for copper.

Freeport was awarded a contract to exploit copper and gold in Ertsberg mining site in 1967, valid for 30 years. In 1989, the Suharto administration awarded another contract for Freeport to exploit gold and copper deposits in Grasberg mining site, near the initial site of Ertsberg in Papua. Under the latest contract, the Freeport operation in Indonesia expires in 2041.

Central Omega Buys 99% Stake in Itamatra

Source : M. Tahir Saleh/, Monday, 16 January 2012

PT Central Omega Resources - previously named after Duta Kirana Finance - together with its subsidiary PT Bumi Konawe Abadi bought 2,000 shares of PT Itamatra Nusantara for IDR1.83 billion.

The share purchase will help the company continue with its expansion plan to trading of mining products, which was kicked off as of 2008. The DKTF-coded company is a multi-financing company licensed by Bapepam-LK.

Central Omega's President Director Kiki Hamidjaja in his information disclosure to Indonesia Stock Exchange said that the share purchase was completed on January 10, 2012, and was declared as not a material or affiliated transaction.

Following the purchase, Central Omega holds 1,980 shares or 99%, while Bumi Konawe owns the other 20 shares of 1%.

Denpasar, Bali-based Itamatra was established on September 27 and holds an exploration license in Morowali, Central Sulawesi.

N. Sumatra Martabe Gold and Silver Mine Eyes March Operation

Source : Reuters, Binis Indonesia & International Business Times, Monday, 16 January 2012

The Martabe gold and silver mine should have started operations in 2011 but the heavy rains in the Sumatra region hampered it from doing so. Its original owner, OZ Minerals spent about $285 million constructing the mine that started in June 2008. However, in May 2009, Hong Kong-based G-resources Group acquired 95 per cent stake ownership in the Martabe gold and silver mine project, for $220 million, from Oz Minerals.

Peter Albert, CEO of G-Resources, on Saturday said construction works on the Martabe gold and silver mine project is almost 76 per cent complete, noting some $450 million of a planned $576 million budget had been spent to build the mine.

Bisnis Indonesia quoted Peter Albert saying the company targets gold and silver mine to start production in the end of March and reach the top average production in 2013 with of 250,000 ounces of gold per year and 2 or 3 million ounces of silver per year.

“From the beginning until today, we have spent US$600 million. In this year, especially in the next 2 or 3 months, we still need a capital expenditure of US$150 million. Since, it is a big project,” he said after the inauguration of Sopo Nauli yesterday.

Sopo Nauli (a beautiful house) is an office building of G-Resources in Batang Toru, Tapanuli Selatan has a Batak architecture. The ceremony was attended by Chairman G Resources Chiu Tao dan a Tapanuli Selatan-born Commisioner of PT Agincourt Resources-a subsidiary of G-Resources which managing Martabe Project-Anwar Nasution.

Agincourt Resources is the owner of seventh generation of working contract signed on April 28, 1997.

The Martabe gold and silver mine project is seen as one of the more promising undeveloped mineral deposits in Asia as it hold massive but proven reserves of gold and silver, according to the

Bisnis data recorded that besides G-Resources, shareholders of Agincourt Resources includes North Sumatra local government with 5% ownership. Of the 5%, North Sumatera government has 70% and Tapanuli Selatan government owns 30%.

G-Resources has a standby loan of US$100 million from BNP Paribas, Hang Seng Bank Limited, and Sumitomo Mitsui Banking Corporation. The standby loan is provided in form of revolving credit facility agreement.

The loan will be needed to finance the completion of the Martabe gold and silver project and to support the activities of the company in the future.

The loan facility is valid for 2.5 years and has a settlement date on June 30, 2014 without hedging fee. The initial interest is in LIBOR plus 4.5% which will be down to LIBOR plus 4% after the settling of Martabe project and the approval of the completion of test from the three banks.

The company still has cash of US$242 million and other liquid assets. This amount should be enough to finance mining projects Martabe gold and silver production until well into the future and have the cash flow.

The Commissioner of Agincourt Resources Anwar Nasution claimed that the presence of the mining company in South Tapanuli is expected to increase the region's economy particularly to the benefit of infrastructure development besides the expected technology transfer of mine management.

Indo Mines Limited - Capital Raising Update

Source : AXS Announcement, Monday, 16 January 2012

Indo Mines Limited (ASX: IDO) (Company or Indo Mines) is pleased to announce that it has received confirmation that the Rajawali Group Board has approved proceeding with the $13.2 million placement in the Company pursuant to a subscription agreement (Agreement) entered into between the parties.

A General Meeting is being held on 30 January 2012 for shareholders to approve the placement of 57.3 million shares at $0.23 to the Rajawali Group representing a 19.9% strategic holding in the Company.

The significant cash injection from the Rajawali Group provides cornerstone funding to the Company to assist in completing construction and commissioning of the demonstration plant at Karawuni, additional testwork required for development of the iron sands project and completion of project finance due diligence.

Buma Mined 2.7 Million Tons Coal Last Month

Source :, Monday, 16 January 2012

BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to company’s press release.

Average rain hours across the BUMA sites in December 2011 was 96 hours, 29.2% higher than the average in December 2010. Year to date, BUMA produced 334.1 million bcm of overburden (+14.3% YoY) and 34.7 million tons of coal (-1.0% YoY).

The statment further said that, strip ratio in December 2011 was 9.4x versus 9.0x in November 2011 and 8.6x in December 2010. Average strip ratio during 12M11 was 9.6x (+15.5% YoY).

About Delta Dunia
PT Delta Dunia Makmur Tbk. is a holding company with an investment focus on mining services. Through its wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur is now the largest pure play mining contractor listed on the Indonesian Stock Exchange.

BUMA is the second largest coal mining contractor in Indonesia, providing mining services under long-term operating agreements with some of Indonesia's largest coal producers, such as PT Berau Coal, PT Adaro Indonesia, PT Kideco Jaya Agung and certain subsidiaries of PT Bayan Resources.

BUMA's full range of coal mining services include mining infrastructure development and construction, land clearing, removal of top soil, drilling and blasting, overburden removal, coal mining, hauling, reclamation and rehabilitation of mine sites.

Thai Miner Asked to Stop Exploration

Source : Ridwan Max Sijabat/The Jakarta Post, Monday, 16 January 2012

The government has ordered PT Multi Tambangjaya Utama (MTU) to stop coal exploration in Buntok, Central Kalimantan, until the Supreme Court issues a final decision on the troubled company’s fate, says an official.

Thamrin Sihite, the director general of minerals and coal at the Ministry of Energy and Mineral Resources said MTU, a subsidiary of a Thai mining company, had to comply with the verdict of the Buntok District Court, which declared the company “in default” in August, 2011, for damaging the production forestland at its mining site.

“We have established coordination with the Central Kalimantan governor and the Buntok regency administration to urge the coal mining company to stop its activities until the Supreme Court issues its decision on the appeal submitted by the office of the Buntok district attorney and until the Forestry Ministry evaluates the rehabilitation [process] made by the company in the damaged forest area,” he told reporters here recently after meeting with the House of Regional Representatives.

Sihite underlined that the Thai company was not allowed to lend or sell its mining permit to other mining companies until the Supreme Court issued its verdict.

“The Thai investor can sell the company but not the mining permit,” he said, adding he was considering revoking the work contract.

The office of the Buntuk district attorney appealed to the Supreme Court after the district court acquitted MTU CEO Warayot Sermsaksakoon of any charges. Warayot was tried for ordering mining works in production forests without a permit from the Forest Ministry.

However, the court declared the company’s mining operation in default. For this, the company is required to compensate for environmental damages.

The Anti-corruption Community (MAKI) urged the government to terminate the Thai company’s operation because it had been declared in default by the district court. It said that despite the court’s decision, the company has resumed its operation and export of its coal stock.

MTU spokesman Bagus Jaya Wardhan said his company has stopped its activities, except activity related to environmental repair work as required by the court.

“MTU has terminated its exploration in compliance with the court verdict while making necessary repairs and rehabilitation of the damaged area in the production forest area, which is part of the company’s concession area,” he said.

Bagus also said his company would report to the Forestry Ministry on progress made in the repair work associated with its efforts to secure permission to resume operations.

PT Timah to Order More Large Dredges

Source : ITRI, Antara & Investor Daily, Tuesday, 17 January 2012

State-controlled Indonesian tin producer PT Timah said it will order two new generation dredges worth around US$100 million this year, the Antara news agency reported. The two bucket wheel dredges are due to be operational in 2014 said Wachid Usman, Timah's President Director, adding to another dredge of the same type which is planned to be in operation in 2013.

Timah is gradually upgrading its dredge fleet, replacing its old bucket ladder dredges by either the new deep water vessels or smaller lower cost cutter suction ones. It a recent presentation the company said that its offshore tin mining leases contained resources of an estimated 649,402 tonnes of tin, of which 217,549 tonnes was classified as proven and probable reserves. Timah's offshore operations produced 20,444 tonnes of tin-in-concentrate in 2010, although production in 2011 is expected to have declined.

The company's corporate secretary Abrun Abubakar said Timah has set capital expenditure at Rp2 trillion (US$222 million) this year to finance the purchases of the dredges. Abrun said part of the capital spending will also be used for its Mentok tin smelter on Bangka island.

Killara Resources Shares Spike More Than 20%

Source : Christine Feary/ ProactiveInvestors & Bisnis Indonesia, Tuesday, 17 January 2012

Killara Resources (ASX: KRA) has managed a hefty 21.74% share price increase today, with 302,000 shares changing hands.

In early December, Killara started a ground-based geophysical survey at the Belu Manganese project in mid-October 2011, and in December completed two survey lines across Target 2.

Shares in Killara are trading at A$0.14, up 21.74% on yesterday’s closing price, but lower than the company’s intraday high of A$0.165.

Killara Resources (ASX: KRA) specialises in precious metals, energy and base metal resources, with an emphasis on sustainable mining practices and community engagement.

Bisnis Indonesia previously reported that Ridwan Zachrie, CEO of PT Killara Indonesia said his company aims to buy 5 coal and gold mining concessions in Sulawesi and Papua, said, adding that it has talked with local miners such as PT Adaro Energy Tbk and PT Medco Energi Internasional Tbk.

Clean and Clear Mining Permits to be Completed End of 2012

Source : Vega Aulia Pradipta /, Tuesday, 17 January 2012

The government plans to announce 700 mining permits with ‘clean and clear status’ without overlapping on other permit holders in the near future so all of the permits are expected to be complete at the end of 2012.

Since the issue of Mining Act, the Ministry of Energy and Mining Directorate General of Mineral Resources (ESDM) until mid-2011 there were 9,662 mining permits (IUP) issued by the local governments.

Of the total IUP, only 3,778 permits have clean and clear status. Clean and clear status shows that the mining areas have complete documents and no overlapping areas.

The remaining 5,884 permits are problematic. In fact, there are expected to be significant unclear permits since the licensing authorities are held by the local governments. This is because regional heads or regents neglect to manage the matter.

A Bisnis’ source said that in one area of East Kalimantan, to take power of attorney over the adjustment of mining permit status into exploration permit about IDR250 million is needed, while the 'cost' for a production permit ranges between IDR500 million and IDR1 billion.

“It is caused by the unprofessional regents who gave permits to more than one party," said Thamrin Sihite, Director General of Mining and Mineral Resources Ministry last weekend.

The Directorate General of Mineral and Coal has assigned the University of Indonesia (UI) to resolve the issue. The appointment has caused internal resistance since the verification which was actually conducted by the Directorate of Commercial Directorate of Coal and Mineral has to be taken over by an Independent Team from UI.

The completion of the mining permit verification, Thamrin said, is expected to boost state revenues from the mining sector.

"With reconciliation, the mining permit will be more orderly. In addition, the permit holder who usually pays a dividend to the regional government, will now be expected to pay the central government. The central government has also conducted socialization to the local government so that the payment of non-tax state revenues can be deposited to central. Then, it will be distributed to the local government, "he said.

Besides completing the reconciliation of mining permit, the government also continues to fix the mining sector. President Susilo Bambang Yudhoyono has formed an evaluation team to adjust working contract (KK) and the agreement of the coal mining business (PKP2B) in accordance with Presidential Decree No.3/2012.

The team is composed of the Coordinating Minister for Economic Affairs Hatta Rajasa as the chairman, the Minister of ESDM Jero Wacik as Chief Executive and Director General of Mineral and Coal Thamrin Sihite as the secretary.

The evaluation team members consists of the Minister of Finance, Minister of Home Affairs, Minister of Justice and Human Rights, Minister of Industry, Minister of Trade, Minister of Forestry, Minister of SOEs, the Cabinet Secretary, the Attorney General, Chief of Financial Development Supervisory Board (BPKP), Head of National Land Agency (BPN), and the Head of Investment Coordinating Board (BKPM).

Contract Changes Could Put Mining Industry on the Rocks

Source : Wayne Forrest/Jakarta Globe, Tuesday, 17 January 2012

Stability in international business is based on many factors but one of the strongest is the sanctity of contracts.

For at least a generation, Indonesia’s mining industry has been characterized by a highly stable contract of work that helped bring steady royalties and tax revenues to the people of Indonesia as well as provide a secure basis for substantial foreign and domestic investment.

Recent statements from the Ministry of Mines again raises an issue that has lingered in Indonesia since the end of the New Order government: Should these contracts be altered in light of the new era and evolving changes to the legal environment, and are the splits in revenue “fair?”

In order to understand this you have to know that Article 23 of Indonesia’s Constitution mandates that all resources below the ground be for the “benefit of the Indonesian people. The article acts as the basis of mandatory contracts between both government and privately owned mining entities with the state.

These benefits are distributed via a negotiated contract that fixes royalty and tax payments as well as other obligations. 2001 changes to Indonesia’s laws on the distribution of revenue from mining activities, a 2003 decree on royalty fees and the 2009 revision to the Mining Law have created uncertainties that have slowed new investment in exploration.

The uncertainty comes not only from inherent conflicts between the new rules and the existing legacy contracts but also from statements from government officials on how the new rules will be implemented.

While it is the prerogative of any party to attempt to renegotiate a contract, such actions, unless otherwise stipulated, must be by the consent of both parties. If one party wants to stick to existing terms they must have the right do so.

It would not be in Indonesia’s interest to unilaterally impose new rules retroactively on existing contracts. Such a change would threaten future investment but there is now concern that current efforts to gain better terms from existing contracts in the face of market changes (higher commodity prices) represents a step in that direction.

Regarding the government’s attempt to renegotiate contracts, the director general of mining, Thamrin Sihite, recently told a legislative hearing that “60 percent of the mining companies have agreed,” that only Newmont and Freeport had not, and that “what’s important is that the renegotiation should be for the best interest of the country.”

Not withstanding the imprecision in Thamrin’s math (there would have to be only five mining companies in total for his figures to be correct), the definition of “best interests” is highly subjective. In fact it could easily be argued that renegotiating creates harmful contract uncertainty that could blight a key sector of the economy.

We expect and hope other voices within the government will stand behind the sanctity of contracts. This will provide the greatest benefit to the people of Indonesia.

Wayne Forrest is president of the American Indonesian Chamber of Commerce, a bilateral organization based in New York.

Newmont Expects Higher Costs, Lower Copper Output

Source : Reuters & Globe and Mail, Tuesday, 17 January 2012

Newmont Mining Corp. (NEM-N60.35-0.59-0.97%) said mining costs for gold (GC-FT1, 666.506.600.40%) and copper (HG-FT3.810.061.56%) are expected to rise this year, mainly because of higher labour and power prices in Australia, and it forecast a drop in copper production because it was currently mining lower-grade ores in Indonesia.

The outlook sent the Denver-based company’s shares more than 3.5 per cent in morning trading on the New York Stock Exchange.

Newmont, the world’s second-largest gold producer, said it produced less gold and copper in 2011 and the fourth quarter than a year earlier. Preliminary results showed it mined 5.2 million ounces of gold and 206 million pounds of copper in 2011. That compares with 5.4 million ounces of gold and 327 million pounds of copper it produced in 2010.

In the fourth quarter of 2011, Newmont said it produced about 1.3 million ounces of gold and 48 million pounds of copper ` down from 1.4 million ounces of gold and 74 million pounds of copper in the same quarter of 2010.

In November, Newmont said lower output in Nevada and higher costs at its Boddington mine in Australia could affect results.

The company said it expects 2012 gold production of about five to 5.2 million ounces and copper production of 150 to 170 million pounds.

It also expects the cost of mining gold to rise to $625-$675 (U.S.) an ounce, from $560-$590 in 2011. The cost of copper production, too, will rise to $1.80-$2.20 a pound, from $1.25-$1.50, the company said in a news release.

It gave no reason for the lower copper target or the cost increase, but a spokesman later told Reuters the lower copper production was a result of “stripping” at its Batu Hijau mine in Indonesia. During the process, the company was digging more rock containing lower-grade ore, in order to gain access to part of the mine with higher grades.

“It’s part of the mine plan,” spokesman Omar Jabara said. “Our cost jump is largely due to the APAC [Asia-Pacific] region, Australia and New Zealand ` labour and higher power prices.” He added that a new carbon tax in Australia will add some $15 an ounce to the cost of gold production.

The company said it expects to invest about $3- to $3.3-billion in capital expenditure this year. About 60 per cent of that will go towards growth projects like Akyem in Ghana and Conga, in Peru.

The proposed $4.8-billion Conga project has been beset by protests by environmentalists who claim it will damage the local water system. The government says the project will be the largest mine operation in Peru and generate thousands of jobs

Pan Pacific, Sumitomo Won’t Buy Copper Ore From BHP in 2012

Source : Jae Hur and Ichiro Suzuki /Bloomberg, Tuesday, 17 January 2012

Pan Pacific Copper Co. and Sumitomo Metal Mining Co., Japan’s two largest producers, won’t purchase concentrate from BHP Billiton Ltd. this year via an annual contract.

Pan Pacific ended negotiations for an annual contract, a senior executive who declined to be identified as the discussions were private, said today. Sumitomo Metal Mining spokesman Masashi Takahashi said it won’t purchase concentrate from BHP this year under an annual contract after failing to reach an agreement on processing fees.

Japanese smelters have struggled to secure 2012 fees with BHP after agreeing with Freeport-McMoRan Copper & Gold Inc. to charge $63.5 a metric ton and 6.35 cents a pound, up from $56 and 5.6 cents in 2011. An increase in fees, known as treatment and refining charges, or TC/RCs, boosts smelters’ revenue.

“This is a rare case for annual deals,” said Takashi Murata, an analyst at Daiwa Securities Capital Markets Co. in Tokyo. “The volume of concentrate this year with BHP may not be very significant or BHP’s offer may be less than Freeport’s.”

Kelly Quirke, a Melbourne-based spokeswoman for BHP, declined to comment on individual contracts with companies. Calls to Pan Pacific spokesman Kouichi Shirai’s mobile phone and office were not answered.

Pan Pacific said yesterday it plans to restart its Saganoseki smelter in February, about a month after the fire on Jan. 7 damaged an electric power substation at the site in Oita prefecture, southern Japan.

Increased TC/RC’s
Treatment fees are expressed in dollars per ton of concentrate received and refining fees in cents per pound of copper in the ore. The fees are deducted from the price paid by smelters to mining companies for the raw material.

“Now the focus is on what other Japanese smelters will do,” Murata said. Japanese companies have been pursuing increased annual TC/RCs with the stronger yen against the dollar and slowing demand for refined metal, he said.

Toshiaki Yamada, a spokesman at Mitsubishi Materials Corp., Japan’s third-largest smelter, said negotiations with BHP had ended, without elaborating.

Chinese Smelters
BHP offered Chinese smelters annual copper ore treatment fees of $60 a ton and 6 cents a pound for refining, two smelter executives with knowledge of the discussions said Jan. 4, asking not to be identified as the talks were private.

The processing fees were lower than the $63.5 a ton and 6.35 cents a pound settled between Jiangxi Copper Co., China’s largest producer, and Freeport-McMoRan Copper & Gold Inc. in November. Pan Pacific also set the 2012 fee at the same level with Freeport in early December.

Pan Pacific said in May that it agreed with BHP to $90 and 9 cents for July 1 to Dec. 31, up from $70 and 7 cents in the first half. The company is 66 percent owned by JX Nippon Mining & Metals Co., a unit of JX Holdings Inc. Mitsui Mining & Smelting Co. holds the remainder.

Copper for three-month delivery on the London Metal Exchange rose 1.9 percent to $8,245 a ton at 4:40 p.m. Tokyo time after touching $8,248, the highest level since Oct. 28. BHP owns Escondida, the world’s biggest copper mine, while Freeport runs the Grasberg mine in Indonesia.

With assistance from Soraya Permatasari in Melbourne.
Editors: Jarrett Banks, Richard Dobson

Southern Arc Provides Drilling Results from Waterfall Target, Mencanggah Prospect

Source : News Release, Wednesday, 18 January 2012

Southern Arc Minerals (TSX-V: SA, OTCQX: SOACF)(“Southern Arc” or “the Company”) is pleased to provide final results from Phase 1 drilling at the Waterfall Target in the Mencanggah Prospect on Southern Arc’s West Lombok Property in Indonesia.

Final assay results have been received for the Phase 1 Waterfall target drill holes MCG003 to MCG027. All intersections are reported as down-hole lengths. At Waterfall, 27 drill holes totalling 6,634 meters have been completed. Drilling tested outcrops of banded and brecciated epithermal chalcedonic-quartz veins for the presence of high-grade shoots at depth. These results confirm multiple vein zones at Waterfall, with the highlight intersections being:

MCG016 4.75m @ 15.6 g/t gold and 15 g/t silver from 168.50m Including 2.0m @ 36.1 g/t gold and 31 g/t silver from 169.70m

MCG006 1.6m @ 11.0 g/t gold and 2.6 g/t silver from 122.35m

Along the 2 kilometers of cumulative vein strike drill tested at Waterfall, best results appear to be localized on sections of the vein that strike north-northwest, which is the prominent structural control for gold mineralization throughout the property. Results from MCG001, MCG006 and MCG016 show significantly higher tenor supporting this concept. At least three north-northwest trending vein segments remain under tested for potential high-grade shoot development and will require more in-fill drilling.

Results from Waterfall confirm the presence of discrete high-grade shoots developed within the West Lombok epithermal systems. These results will be further interpreted and ranked with results from the other Mencanggah and Pelangan targets for future drilling. The decision to initiate Phase 1 exploration at the Waterfall target, rather than higher priority targets such as Bising and Tibu Serai, was a strategic decision as the Company worked to establish a strong corporate and security presence in the region.

The Company currently has two rigs drilling on the Jati and Tanjung targets on the Pelangan prospect, where previous exploration identified a continuous 1.5km-long mineralized epithermal breccia hosting at least one high-grade lode structure. Previous drilling intersections include 10.05m @ 13.4 g/t gold and 8 g/t silver (TGD-02), 9.2m @ 5.9 g/t gold and 11 g/t silver (JDG-03) and 26.2m @ 4.2 g/t gold (including 3.45m @ 12.3 g/t gold: PLD-027).

On behalf of the Board of Southern Arc Minerals Inc.
“John Proust”
Chairman & Chief Executive Officer

About Southern Arc
Southern Arc Minerals Inc. is a Canadian mineral exploration company with an aggressive exploration, acquisition and growth strategy. The Company’s portfolio includes four exploration projects with epithermal gold and gold-copper porphyry prospects on the Lombok and Sumbawa islands in Indonesia, three of which are being advanced in partnership with major mining companies Vale and Newcrest. The Company’s key exploration property is its West Lombok project, with several gold-rich copper porphyry and epithermal gold vein prospects. Southern Arc is listed on the TSX Venture Exchange under the symbol SA and on the OTCQX International under the symbol SOACF.

Fitch May Give Adaro Investment Grade Rating

Source : Esther Samboh/The Jakarta Post, Wednesday, 18 January 2012

Major international rating agency Fitch Ratings may raise the debt rating of Indonesia’s second-largest coal producer PT Adaro Energy Tbk (ADRO) to investment grade if the company expands to other coal mining sites, thanks to strong financial fundamentals amid rising demand for coal.

The upgrade of Adaro’s rating grade, which is currently BB+ with a stable outlook, which is one notch below investment grade, may happen in the medium-term, Fitch’s head of Asia Pacific corporate ratings group Andrew Steel told a briefing on Tuesday.

“[Adaro] is one of the world’s lowest-cost producers of thermal coal, and regional demand for thermal coal is extremely strong. The demographics and economic changes throughout the region continue to drive demand for power, and coal remains generators’ choice throughout the region,” he explained.

Indonesia is the world’s largest exporter of thermal coal and Adaro is the nation’s second-largest coal miner with expected output of 46 to 48 million tons in 2011. Nationwide coal production is forecast at 340 million tons.

Adaro’s net income nearly doubled in the third quarter of 2011 from the same period of the previous year to US$376 million, as revenue was up by almost 50 percent to $2.92 billion.

“Adaro is stable and profitable. It also has a long-standing and creditworthy customer base,” Steel said.

Volatile global coal prices should not be a problem for Adaro given its low-production costs that place it in a “strong position to have flexibility in the way that it copes for changes in prices”, but the major constraints for Adaro’s possible rating upgrade are site diversification and debt-funded acquisitions, Steel added.

“Looking at acquisitions, part of it is debt funded, so there will be weakening of its financial profile over the next 12 to 24 months.

“Any improvement in its mine sites diversity are likely to reduce its dependence on a single location of South Kalimantan. Once that location goes through some difficult and challenging conditions, it will be a single-side risk for investors.”

Fitch recently upgraded eight banks and five other companies’ credit ratings to investment status after the ratings agency lifted Indonesia’s sovereign debt status to investment grade.

The firms are state-run giants in the utilities, telecommunication and energy sectors while the banks are mostly state- and foreign-controlled: Pertamina, PGN, PLN, Telkom, Telkomsel, Bank BCA, Bank Mandiri, Bank BRI, Bank BNI, Bank CIMB Niaga, Bank BII and OCBC NISP.

“When other emerging markets move into investment grade, the firsts to follow are state companies, and then it takes quite a long time for the corporates to catch up,” Steel said.

Adaro, Indonesia’s largest coal miner by market value with capitalization of Rp 57.57 trillion as of Tuesday, has seen its shares (ADRO) tumble 30.1 percent in the past year as high volatility in the commodities market has prompted sell-offs of commodities stocks during 2011.