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Churchill Mining files US$1.315bn claim for damages in East Kutai case

Churchill Mining files US$1.315bn claim for damages in East Kutai case

Churchill Mining (LON:CHL) is filing a US$1.315 billion claim for damages against the Indonesian government for the expropriation of the firm's rights over the huge East Kutai coal mine.

It follows an independent valuation of the project by experts FTI Consulting for Churchill and 100% subsidiary Planet Mining.

FTI have put the damages to Churchill/Planet of US$1.149bn plus pre-award interest of US$165.70 mln for a total of US$1.315bn.

In March last year, Churchill filed for damages to the tune of just over $1 billion (£622.1 million) but today's figure is higher.

The case centres on Churchills's claim that following its investment in Indonesia, initially supported by the Indonesian government, it discovered substantial coal deposits after which the government took unlawful actions.

A feasibility study has put the pre-tax net present value of the mine at US$1.8bn, an internal rate of return of 21% and a payback period of seven years.

Churchill chairman David Quinlivan said: "This valuation further confirms the billion dollar plus loss that we believe was suffered by our shareholders as a result of the actions taken by the Republic of Indonesia in relation to the EKCP mining tenements."

The next step in the proceedings is that the Republic of Indonesia is now required to file its memorial of defence by November 12 this year.

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