Another update released today ...
Cokal Achieves First Revenue from Sale of 23,000t of Metallurgical Coal to International Commodity Trade Pte
Ltd under the exclusive off take agreement for international market
Cokal Achieves First Revenue from Coal Sales
- Cokal has sold ~23Kt of metallurgical coal to International Commodity Trade PTE LTD (ICT) from the BBM coal mine, comprising of:
i. 8,000 mt coking coal;
ii. 15,000 mt PCI coal.
- This sale will generate immediate revenue for BBM and Cokal
- Cokal has been paid 80% of the anticipated revenue from this sale by ICT as per the terms of the International Coal Marketing Agreement (ICMA)
- The coal has been sold into the export market as pricing and terms are superior to what is available in the Indonesian domestic market
- Domestic sales of coking coal and PCI coal to local end user clients in Morowali, Sulawesi are anticipated to commence in early 2024.
Coal Marketing via ICT
Cokal has previously announced that it has entered into the ICMA with ICT. This facilitates the sale and payment of the proceeds of coal sales in the export market so that Cokal / BBM can receive funds immediately, thereby enhancing conversion of coal stock piles to cash in a timely manner.
ICT carries the timing and credit risk for the final sale to the end user. Cokal receives the full sales price, less a 6% discount off the final sale amount to the end user, from ICT.
Cokal references the ICMA entered into with ICT (announced 14 July 2021 and amended 24 December 2021).
- The ICMA was entered into as part consideration for ICT providing Cokal / BBM with US$20m of capital to fund the development of BBM
- The ICMA provides ICT with the marketing rights for BBM coal sold on international markets, and the ability to purchase coal from BBM at the same price and terms as other customers
- The terms of the ICMA provide for BBM to receive 80% of the coal price upon the loading of barges from the Intermediate Stockpile