Prestripping has begun at the mine area in the coal region of East Kalimantan.

Formerly known as Kangaroo Metals, the explorer is clearing out a port site to be used to barge coal along the Mahakam River to Indonesian utility PLN.

Kangaroo said the access road linking the port site to the initial mining area was in better condition than expected and it planned to buy a 5000-tonne barge.

Using the barge will save up to $US4 a tonne in operational costs, according to company estimates.

The barge is expected to arrive shortly while contractors are upgrading all the access roads as necessary.

Mine management and personnel are onsite and Kangaroo is confident its Indonesian partners will hit the production targets, while offtake sales agreements with local power suppliers are stitched up for the first three months of output.

Kangaroo is aiming for 25,000t per month but plans to ramp up GPK to 1-2 million tonnes per annum in 2010.

“We are very pleased with the progress of development so far at GPK and are now in the position to mine and ship our first coal very shortly,” Kangaroo chairman Mark O’Keeffe said.

“Our ability to achieve the initial production targets at GPK will underpin our broader growth strategy and provide significant positive momentum for the company moving into the new year.”

Kangaroo recently acquired 84.82% of the GPK project after raising $A38 million in equity over the past two months.

As part of the purchase from PT Graha Panca Karsa, Kangaroo also added the Kubah Indah, Jawana and Borami coking coal projects and the Tanur Jaya, BP and MBK thermal coal projects to its portfolio.

The company is seeking to produce more than 10Mtpa within three years as its other Indonesian projects start up.

Kangaroo shares gained 9.8% yesterday and are 1c up this morning to 23c.