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Kangaroo delays Indonesian restart

7th March 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed junior Kangaroo Resources has decided to delay the restart of operations at its Mamahak coal mine, in Indonesia, pending the completion of an operational review.

Operations at Mamahak were suspended in November last year, following an industrial dispute between the mining contractor and the on-site personnel.

Kangaroo told shareholders on Thursday that it used this period to review operational efficiencies at Mamahak, including mine plans and strip ratio, contractor performance, barging strategy and exploration practices with the aim of lowering costs to counteract the impact of the declining coal prices.

The review had identified cost-cutting measures, including the potential to lower the mining strip ratio, which would result in reduced targeted production rates.

Kangaroo said that it had now terminated its agreement with the contract miners, which the company said had equipped it to meet the previously agreed production rates rather than the lower rates now being proposed.

The mine would pay some $2.8-million in compensation to the contractor for infrastructure built on site, and to offset the cost of demobilising equipment, as well as to cover termination fees associated with equipment on standby.

Kangaroo had further signed an agreement with another mining contractor.

The miner was also in discussions with barge operators as part of a plan to ship stockpiles totalling some 133 000 t of coal, with an estimated profit value of A$10-million.

Edited by Creamer Media Reporter

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