Cokal Limited has advanced its metallurgical coal operations in Central Kalimantan with new mining contracts, resumed coal shipments, and infrastructure upgrades, aiming for a 2026 production target of approximately 420,000 tonnes.
- Five-year mining contract awarded to PT Harapan Mitra Lestari
- Resumption of coal shipments with improved pricing to key Indonesian steelmakers
- 2026 production target set at around 420,000 tonnes with potential for increase
- Significant infrastructure and haul road upgrades underway to support ramp-up
- Regulatory approvals progressing, including explosives magazine completion
Contractor Mobilisation and Mining Operations
Cokal Limited (ASX – CKA) has taken significant strides in its metallurgical coal operations during the December 2025 quarter, notably appointing PT Harapan Mitra Lestari as its mining contractor under a non-exclusive five-year agreement. Contractor-led mining commenced at Pit 3 following the completion of the first overburden cut, marking a pivotal shift from limited in-house mining to a more scalable operational model. Mobilisation included deployment of approximately 150 personnel and multiple excavator fleets, with plans to introduce larger equipment in the coming months, contingent on market conditions.
Coal Sales and Market Conditions
The quarter also saw the resumption of coal sales after a hiatus since May 2025. Cokal successfully shipped 7,500 tonnes of coal to PT Krakatau Posco, part of the POSCO Group, achieving improved pricing that reflects strengthening market dynamics. Additional commercial trial shipments to PT Dexin Steel Indonesia and PT Detian Coking Indonesia further underscored renewed demand and acceptance of BBM coal in regional steel markets. Market conditions for metallurgical coal have improved modestly, supported by tightening supply and steady demand, particularly from India, despite some softness in China.
Production and Infrastructure Development
Looking ahead, Cokal has confirmed a 2026 production target of approximately 420,000 tonnes, with flexibility to increase output by engaging additional contractors if market conditions remain favourable. To support this ramp-up, the company is advancing critical infrastructure projects, including haul road upgrades and expanded workforce accommodation. Petrosea has commenced on-ground preparation works, focusing on key haul road sections to ensure reliable coal transportation. Additional haulage capacity is expected to come online shortly, enhancing logistics efficiency.
Regulatory Progress and Operational Readiness
On the regulatory front, Cokal achieved formal approval for its explosives magazine warehouse in January 2026 and is progressing permits for drill-and-blast operations, expected to commence by the end of February. The company is adapting to Indonesia’s new integrated digital mining regulatory platform, Minerba One, which centralises approvals and compliance monitoring. Cokal remains confident that this transition will not disrupt planned operations. Exploration activities at the adjacent Tambang Benua Alam Raya tenement are anticipated to begin in late Q2 2026, pending final permit approvals.
Financial Position and Outlook
Financially, Cokal ended the quarter with US$554,000 in cash and undrawn financing facilities of approximately US$2.46 million, providing a runway of around 12 quarters based on current expenditure levels. The company spent US$2 million on production activities during the quarter and continues to manage its debt facilities prudently. With improving market sentiment, advancing regulatory approvals, and operational capacity building underway, Cokal is positioned to progressively ramp up production throughout 2026, although this remains subject to market and logistical factors.
Bottom Line?
Cokal’s operational momentum and strategic infrastructure investments position it well for growth, but market and regulatory variables will be key to sustaining this trajectory.
Questions in the middle?
- How will evolving Indonesian mining regulations under Minerba One impact Cokal’s operational flexibility?
- What is the timeline and scale for deploying larger 100-tonne mining fleets at BBM?
- Can Cokal secure additional long-term off-take agreements to underpin production growth?