PHI has agreed to a $10.5 million deal for the site’s tenement, purported to hold 71 million tonnes of measured coal in Indonesia.

The 9700-hectare concession in the country’s West Sulawesi province claims a 205Mt indicated coal resource and is being independently assessed by PT Runge Indonesia.

Specifications from laboratory analysis of coal samples at the concession include a gross calorific value of 6278 Kcal/Kg, total moisture of 6%, total sulphur of 0.87% and 17.1% ash.

However, the study by Runge will provide an independent and more accurate understanding of the coal deposits at these concessions, the company said in a statement.

If the results are satisfactory PHI will proceed to close the purchase of TSA and continue with the mine planning.

PHI will pay a total of $5,250,000 in common stock and $5,250,000 in cash for a 70% stake in Tambang.

Both companies expect to close the transaction by March 2013.

PHI Group Chairman and CEO Henry Fahman said, "We are fortunate to be associated with a number of highly respected and professional mining consulting firms in Indonesia and are especially delighted to have Runge's assistance in the technical due diligence of the TSA project."

This transaction represents part of PHI plan to accumulate a sizable portfolio of coal assets to respond to the increasing demand for coal in the Asia-Pacific region.

PHI claims to have had interest from a number of buyers in the Asia Pacific region interested in purchasing several hundred thousand MT of coal per month for power plants and other factories.

Annual world coal demand is expected to grow from 7.6 billion tonnes in 2011 to 8.9Bt in 2016 and more than 85% of global demand growth will come from China and India.