LG상사 새소식
LGI Successfully Developed a Large-Scale Coal Mine in Indonesia
Date : 2016-09-30 | View : 74,096

LGI has successfully developed a large-scale coal mine in Indonesia after four years of hard work.

LGI announced on the 29th that it held a completion ceremony at GAM Coal Mine located in the East Kalimantan, Indonesia. About 40 participants including CEO Song Chiho, employees and executives of LGI, and CEOs of partner companies in Indonesia attended the ceremony and successfully celebrated the pilot production.


■ The Successful Development of a Large-Scale 220 Million Ton Coal Mine and the Commercial Operation Will Begin Next January.

GAM Coal Mine is an open-pit mine located on a 106㎢ of land that is 36 times larger than Yeouido (2.9㎢). It is a large-scale mine with roughly 220 million tons of mining reserves. The pilot production which began this month will continue through until the end of this year when the commercial operation will begin in January. The production size will be about 3 million tons and the output will be gradually increased up to 14 million tons.

LGI reserved all rights for all of the coal produced at GAM Coal Mine and will be supplying the product to major markets in India, China, and other Asian countries.

In particular, demand for power is skyrocketing in the majority of major developing countries in Southeast Asia due to its consistent economic growth. Therefore, it is expected that the use of cost-effective coal power facilities will also expand since the current power infrastructures in those countries are in extremely poor condition.

Also, due to its location, GAM Coal Mine is also able to secure strong competitiveness in transportation. Other coal mines in Indonesia are located about 100 to 300km away from an outer port whereas GAM Coal Mine is only 60km away from the port. The ideal location of the coal mine will secure cost competitiveness as well.


■ LGI will grow as a major company in Asia after the Second Successful Development of a Coal Mine in Indonesia

LGI is emerging as a major coal supplier in Indonesia as it has successfully developed the GAM Coal Mine in Indonesia following on from the success of the MPP Coal Mine.

The successful completion of MPP Coal Mine served as a strong foundation for the successful development of GAM Coal Mine. MPP Coal Mine was taken over by LGI in 2007 and it is the first coal mine that was successfully developed by a domestic trading company from exploration to the production phase. Currently, the scope of its production size is about 3 million tons per year and it is also perfectly equipped with the necessary facilities and manpower in addition to the transportation infrastructure including roads and a port.

A representative of LGI stated that, “LGI will grow as a major Asian company by using the GAM & MPP coal mines as the major coal production base which will lead to the expansion of the size of production in Indonesia by 2020.” and added, “LGI will be then able to contribute to improving the power shortage in developing countries in Asia.”


■ Achieved Success after 4 Years of Hard Work by Overcoming Many Difficulties Associated with Land Compensation, Permits, and Inadequate Infrastructure

LGI acquired a 60% share of this coal mine in 2012 and secured the operating rights. Since then, the company overcame many difficulties related to land compensation, permits, production and the construction of transportation infrastructure one by one and achieved a successful outcome.

The company experienced some difficulties in the course of the project development due to the distinct land compensation system of Indonesia, and permit issues caused by overlapping mineral rights and forest rights. However, LGI successfully solved those issues by actively communicating and cooperating with related local government offices. In addition, the Embassy of Korea in Indonesia also actively supported LGI.

CEO Song Chiho conducted meetings with the CEOs of local partner companies for the construction of the infrastructure of the coal mine including the port and land. At the same time, the management team and other working-level teams at the headquarters and the site worked together for the successful completion of GAM Coal Mine despite the difficult project environment.



CEO Song Chiho of LGI (second from right) is pressing a control button of the production facility to commence with the pilot operation of GAM Coal Mine. LGI will begin the commercial operation of the plant from next January and will increase the production size from 3 million tons up to 14 million tons in the future.


 <Reference> The location of LGI’s GAM Coal Mine