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Tuesday, 08 December 09
MEC TO SHIP 2M T INDONESIA COAL TO INDIA IN 2010 - REUTER'S INTERVIEW


The UAE's Middle East Coal plans to start operation of coal mines in Indonesia's East Kalimantan province next year with initial production of 2 million tonnes destined for India, the firm's chief executive said.

Indonesia is the world's top exporter of thermal coal, and coal production in East Kalimantan, on the island of Borneo, accounts for more than half of the country's total coal output, forecast to reach around 230 million tonnes this year.

MEC is a joint venture between UAE investment fund RAK Minerals and Metals Investments (RMMI) and UAE-based mining company Trimex. RMMI won a license in March to build a 150-km (93-mile) rail link to take coal from a mine in East Kalimantan province to a coal terminal.

"We are looking at full-scale production starting in 2010 with a delivery of 2 million tonnes," Naveen Chandralal, Middle East Coal's chief executive officer, told Reuters in an e-mail, adding that it would also begin work on the coal rail project.

The coal will be all exported to India, Chandralal said.

Shipments will subsequently increase up to 32 million tonnes by 2015, he added.

MEC operates a greenfield coal concession in East Kalimantan with estimated resources of 2 billion tonnes of low-sulphur/low-ash thermal coal.

The firm has been in talks to buy equity stakes in India's power plants in exchange for a long-term supply deal.

"Although India is a key market for coal as the country continues to address its power requirement, MEC would like to be part of the Indian growth story rather than just a supplier of coal," Chandralal said.

MEC is close to finalising agreements to take equity stakes in Indian power plants, he said, but declined to identify them, saying that was confidential information.

India is expected to step up coal imports in 2012 for its new power projects as its own production lags.

The firm also expects to start construction of the railway project to link its mine in Muara Wahau to Bengalon port in East Kalimantan, in March 2010, Chandralal said, "with a view to commissioning the first cargo train by early 2012".

The firm has acquired about 80 percent of the land needed for the project, he said. The project is estimated to cost around $1 billion, the firm has said.

Indonesia mostly uses waterways to ship coal as most coal mines are located near rivers or the open sea.
Source: Reuters



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