Cokal Advances Haul-Road Upgrade and Resumes Coal Shipments in Q3 2025
Cokal Limited has resumed coal sales to domestic users and advanced critical infrastructure upgrades at its Indonesian metallurgical coal projects, signaling a strategic operational ramp-up amid improving market conditions.
- Resumption of coal sales to domestic end users after market lull
- Appointment of PT Petrosea Tbk for haul-road upgrade with construction starting November 2025
- In-house mining operations commenced producing near-surface coal for Q4 shipments
- Magazine warehouse construction at 80% completion targeting December 2025 blast
- Cash reserves at US$267k with US$3.54m undrawn financing facilities
Operational Resurgence Amid Market Recovery
Cokal Limited (ASX, CKA) has marked a pivotal quarter ending September 2025, with the resumption of coal sales to domestic customers following a period of subdued activity. This development aligns with early signs of recovery in the metallurgical coal market, particularly for low-volatile hard coking coal grades, which have seen improving demand and pricing.
The company’s flagship asset, PT Bumi Barito Mineral (BBM) in Central Kalimantan, Indonesia, has been the focal point of operational progress. BBM restarted in-house mining operations in October, targeting low strip ratio near-surface coal to support upcoming shipments in the final quarter of the year. This move is complemented by the mobilisation of experienced contractors, including PT Harapan Mitra Lestari for mining and PT Mitra Link Borneo for coal hauling, enhancing operational capacity.
Infrastructure Upgrades to Support Growth
Significant infrastructure projects are underway to underpin Cokal’s production ambitions. The company appointed PT Petrosea Tbk as the main contractor for a major haul-road upgrade, designed to provide all-weather access with a 3 million tonnes per annum haulage capacity. Construction is slated to commence in November 2025 following detailed surveys and commercial finalisations.
Alongside road improvements, the magazine warehouse construction has reached approximately 80% completion, with regulatory inspections and licensing expected imminently. This facility will enable safer and more efficient blasting operations, with the first production blast planned for December 2025.
Despite challenges such as low water levels in the Barito River, coal transportation via truck and barge continues, supported by ongoing maintenance at the Batu Tuhup Jetty and progress on the BLC conveyor project, which is expected to accelerate in early 2026.
Financial Position and Strategic Partnerships
Financially, Cokal ended the quarter with a modest cash balance of US$267,000 but benefits from undrawn financing facilities totaling US$3.54 million. The company spent US$1.06 million on production activities during the quarter, reflecting its investment in operational readiness.
A strategic partnership with PT Petrindo Jaya Kreasi Tbk has been formalised, with Petrindo funding the haul-road upgrade as a prepayment of future toll fees. This arrangement allows Cokal to recover prior haul-road investments while leveraging Petrindo’s capital to enhance infrastructure without immediate cash outlay.
Looking ahead, Cokal’s focus remains on advancing its Indonesian coal assets, including resource delineation at Tambang Benua Alam Raya (TBAR) and progressing underground mining permits at BBM, with licensing expected to conclude by Q3 2026.
Bottom Line?
Cokal’s infrastructure and operational strides position it for a meaningful production ramp-up, but cash constraints and market volatility remain key watchpoints.
Questions in the middle?
- Will the improving metallurgical coal market sustain momentum into 2026 to support Cokal’s growth?
- How will the haul-road upgrade partnership with PT Petrosea and PT Petrindo impact long-term cost structures and margins?
- What is the timeline and risk profile for securing final permits for BBM’s underground mining expansion?
