breakout, page-20

WEC can never come to a satisfactory deal with Bayan because their Tabang mine just doesn't produce enough coal to supply the Tabang BCB plant.

According to Bayan's 2012 investor guidance (http://www.bayan.com.sg/dlw/IU/2012%20Guidance.pdf) their Tabang mine is budgeted to produce only some 0.6 Mtpa at an average strip ratio of 4.5-5.0 as they'll have to remove 2.7-3.0 Mtpa of overburden.
The last time Bayan provided separate figures for Tabang was in their 2010 guidance (http://www.bayan.com.sg/dlw/IU/2010%20Revised%20Guidance.pdf) which forecasted a production of 1.4-1.5 Mtpa while overburden removal should have been in the range of 1 to 2 Mt, which converts into a strip ratio of 0.7-1.3. So obviously the strip ratio has worsened by 346% to 712% over the past two years which implies a significant increase in production costs.
This issue has also been addressed in their 2H2010 half year report (http://www.bayan.com.sg/dlw/quarter/Interim%20Financial%20Consolidation%20as%20of%2030%20June%202011.pdf p.57) station:
"As of 30 June 2011, the deferred stripping costs fo WBM, TSA, PIK, FKP and BT [Tabang] represent the excess of actual stripping costs over the average life of mine stripping ratio."

The 2012 guidance as well as the Q3 quartlery report also mention that Tabang requires significant investments in material handling infrastructure and a coal haul road.

So obviously production costs for the Tabang mine have exploded due to stripping ratio getting out of hand and in addition the existing infrastructure is insufficient to meet the original production targets.
This seems to be typical for Bayan, as an analyst report from Danreksa from July 2010 says that Bayan has a "history of operating below capacity due to the high execution risk of delivering". The same report also says that "81% of Bayan's production cash costs are oil related [...] Our sensitivity analysis suggests that for every 5% change in our oil price assumption, Bayan's core profits will change by 9.2%".
Rising oil prices during the last years have probably further increased production costs.

In the end this means that during 2012 Tabang couldn't have delivered more than 0.6 Mtpa to the BCB plant (which would have sufficed for just 0.4 Mtpa of briquette production) while production costs for the raw coal have exploded.
But according to the last quarterly they were obliged to deliver 1.6 Mtpa to the BCB plant (http://www.bayan.com.sg/dlw/quarter/BR_Financial%20Statement%2030%20Sep%202011FINAL.pdf p.102):
"On 1 October 2010, BT [Tabang], FSP and KSC entered into coal supply agreements under which they are due to supply KSC a combine maximum of 1,600,000 tonnes of coal a year."

Could it be that the "concerns about the commercial viability" by which Bayan explained their breach with WEC rather affects the Tabang mine than the BCB plant?
Did Bayan realize that their Tabang mine would not be able to supply the BCB plant with enough coal and particularly not at the formerly expected costs? If so they would have been at risk to not only make losses but to be sued by WEC for not delivering the agreed quantities of coal. In this situation Bayan could have decided to turn the tables by trying everything to get out of this JV before they get into worse trouble.