Pre-Tertiary, Eocene and Oligocene sedimentary rocks are present in the Tanjung Redeb area but none are found in the Berau Coalfield (Lati, Kelai and Binungan areas). The Eocene and Oligocene sediments are dominantly marine, fine grained clastic rocks with rare volcanic units, although non-marine sandstones and minor coal deposits occur immediately above the basal Tertiary unconformity.

The oldest rocks present in the Berau Coalfield are of Miocene age and belong to the Sterile Formation. This formation is composed of marine mudstone, siltstone and sandstone. The sandstone is massive and fine- to very fine-grained and it is interbedded with mudstone and siltstone. Burrows are common in all lithologies.

The Sterile Formation conformably underlies the coal-bearing Berau Formation although the contact between the formations is difficult to place in the Berau Coalfield. The Berau Formation, at least 400 metres thick, contains interbedded mudstone, siltstone, sandstone and coal. Shell fossils, plant impressions, coal flakes and burrows are common, particularly in the mudstone.

The coal measures of the Tarakan Basin occur in the Berau Formation which contains at least 19 seams. The thicknesses of the seams range from a few centimetres up to 4.5 m with dips of 5° to 20°. Exposure of the seams is good and they can be traced in three geographic areas which correspond to structural zones formed by post Miocene folding - Kelai, Lati and Binungan.

Coal is mined using open-cut mining methods where primary overburden stripping and coal mining are conducted using hydraulic excavators and trucks. The mining process begins with land clearing, followed by top soil removal, drilling and blasting for overburden removal, excavation, transporting coal. Post mining activities are backfilling, final contouring of disposal, and eventual revegetation of pits, after which mining activities are completed.

The coal is transported over an all weather haul road, a distance of some 11 kilometres to the coal processing plant. The coal is crushed blended and placed onto stockpiles. It is then loaded into barges.