At a mining conference in Singapore, Kaltim director Evan Ball told Reuters the deal was for 1 million tonnes in the first year, 2Mt in the second and later ramping up to 5Mt per annum.

He did not state the prices but told the news service they were in line with the current spot market.

Spot prices have been on a downward trend with Newcastle thermal coal at $US60.30 a tonne by the end of last week, while thermal coal from South Africa’s Richards Bay fetched $US58.38/t.

Indonesia is the world’s leading thermal coal exporter with figures gathered by the Reserve Bank of Australia having the nation accounting for 27% of thermal coal exports in 2007, while Australia was in second place with 16% of the market.

The Chinese buyers were not mentioned in the Reuters report.