SOURCE: KAL Energy, Inc.

June 04, 2007 09:00 ET

KAL Energy, Inc. -- Supply Struggles to Keep Pace With Demand for Indonesian Coal

LONDON--(Marketwire - June 4, 2007) - KAL Energy, Inc. (OTCBB: KALG) CEO Mr. Cameron Reynolds -- a presenter at the 2007 Coaltrans Asia conference being held in Bali -- stated, "The resounding theme here is the bullish demand sentiment -- as evidenced by the recent 28% increase in the China/Japan contract negotiation, and the 2-year high reached for Newcastle coal. This is a very positive indication for KAL Energy, and our business model based on our Indonesian coal concessions."

A recent Bloomberg article (June 4, 2007) commenting on the Coaltrans Asia conference quoted Erindra Krisnawan, a Jakarta-based UBS AG analyst, saying, "Indonesia is under the spotlight as buyers will likely turn to the country to fill the gap left by limited growth. The big theme is exports to China."

Indonesian domestic demand continues to grow strongly also. Alluding to the combined strength of both the domestic and export markets, the article quoted Jeffrey Mulyono, the head of the Indonesian Coal Mining Association, as saying, "The world will take any amount we produce but it's impossible to allocate all the coal to exports."

The article went on to quote the May 21 U.S. Energy Information Administration report, which stated, "Indonesia has low-cost reserves of low-sulfur coal, many ports, and proximity to expanding markets in Asia."

The complete Bloomberg article can be found at: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTeSh8nEK.k8

As previously announced, KAL Energy is due to release a JORC-Compliant Resource Statement resulting from a $2 million Phase 1 Exploration program on its Thermal Coal Project in East Kalimantan, Indonesia. This program includes over 5600 meters of extensive drilling, including over 230 holes, trenching, sampling and mapping of known geological structures, and exploration for unknown structures. The report is scheduled to be released in mid June.

KAL Energy, Inc. has rights to two coal concessions situated near the Mahakam River in North Eastern Kalimantan, Indonesia. This river is a main transportation system for transporting coal to nearby markets. Consulting Geologist Jonathan O'Dell has estimated that blocks 16 & 24 could contain over 192,000,000 tons of thermal coal. With one of the world's largest thermal coal exporters, Kaltim Prima Coal (KPC), as its neighbor, KAL energy's concessions are in a region that is known for its extensive open pit thermal coal producing mines. Indonesia has recently surpassed Australia as the world's leading thermal coal exporter, with prices varying from $30.00 to $60.00 plus per ton.

For more information on KAL Energy, Inc. please visit our web site at www.kalenergyinc.com

Notice Regarding Forward-Looking Statements

This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future.

Contact Information

  • Cameron Reynolds
    CEO
    KAL Energy, Inc.
    93-95 Gloucester Place
    London, W1U 6JQ
    Telephone: +44 207 487 8426
    Fax: +44 207 487 8402
    US Investor Relations Line: +1-866-680-2575