Coal Fe Resources has signed a conditional agreement with Tunggal Putra Nusantara (TPN) to acquire a 70% stake in the latter’s anthracite coal concession in Palin, West Sumatra, Indonesia.

The company has agreed to pay $250,000 and grant a royalty of $5 per ton of coal sold. Currently, the mining operations at the concession have been ceased due to insufficient funds.

Coal Fe said it is in talks with several offtake partners for the coal from the mine, and it expects to resume operations within two to six months of shareholder approval with an increase in production to 500,000 tons per year.

The company also signed a deal to buy Mineral Sukses Makmur’s (MSM) iron-ore minein Solok, West Sumatra for $6.5 in cash.

MSM currently produces 30,000 tons of 62% Fe product and Coal Fe plans to increase this output to 60,000 tons.

Coal Fe managing director Robert Swarbrick said, "Coal Fe has a track record of developing and commercialising mines in Indonesia."

"These projects will simply fast track that process and provide shareholders with access to already producing or historically producing projects that have low capital expenditure but provide good operating margins, resulting in significant cash flows for shareholders."