Bayan has advised that based on the current export prices of...

Bayan has advised that based on the current export prices of coal, they have formed the view that the cost associated with upgrading the Tabang run of mine coal may no longer deliver acceptable economic returns for KSC. The key factor in arriving at this position is Bayan’s insistence that the contract price for Tabang run of mine coal must be increased to a price substantially higher than that incorporated in the original coal supply agreement entered into between the parties.
In this regard, Bayan has advised that it can generate much higher margins by selling Tabang run of mine coal directly into the export market, given that the current Indonesian government coal reference price (HBA) for 4,200 Kcal/kg GAR coal is approximately US$60/tonne FOB, which equates to approximately US$40/tonne ex-mine.
These issues go directly to the economic viability of the existing plant located at the Tabang site and the willingness of each of the shareholders to continue with their investment in KSC.