The Indonesian government invited tenders from foreign companies for exploration and development of coal resources in the eastern and southern Kalimantan. A BP / CRA successful joint venture to offer 7,900 sq km area in two blocks extending 300 km along the eastern coast of Kalimantan.
PT Kaltim Prima Coal (KPC) was established in Indonesia with each BP and CRA 50% stock holding. KPC license for exploration and mining of coal by Coal Contract of Work (CoW) with the concession area of 90 706 ha. Indonesian State Coal Company (PTBA) is entitled to received 13.5% of all production.
KPC proceeds with the development of export mine with a design capacity of 7 million tonnes per annum (mtpa) after detailed exploration and feasibility study, prospects is located close to Sengata. The prospect of having a large number of high-quality coal reserves, close to the shoreline with deep water and is strategically located in the growing market services. KPC then handed over large parts of the original agreement, retain 1,961 square miles.
Construction began in January. The budget for this project is US$ 570 million.
Large-scale mining construction of began in June.
Construction completed by late 1991.
Commercial exports began in January 1992.