India's coal ministry has announced that it has, in principle, agreed to set up a joint working group for coal with Indonesia, citing the information given by minister of state for coal Sriprakash Jaiswal on September 7 in New Delhi following a meeting with Indonesia's minister for energy and mineral resources Purnomo Yusgiantoro.
Accordingly, senior officials from the two countries participating in the meeting discussed cooperation between the two countries in the coal sector and the way forward to strengthen this cooperation.
Speaking to the media, Mr. Jaiswal said that there is a great demand for coal in India as the domestic power sector is largely dependent on this resource. India imports about 20 million mt of coal per year from Indonesia and its coal ministry is looking at allocation of IUP (Mining Business Licence)/CCOW (Coal Contract of Work) for new coal mining areas on nomination basis, and is looking at participation in government initiated tender process for the granting of IUP/CCOW. There is also a demand for creation of a joint venture with government entry for acquisition, exploration and development of coal blocks in Indonesia.
Indonesia is a coal rich country with about 60 billion mt of coal resources. The country produced 140 million mt of coal in 2007 and is a major exporter of coal with 118 million mt of coal exports in 2007.
India has been considering acquisition of properties in Indonesia in order to meet its increasing demand for coal. Indonesia has been chosen as a preferred coal source in view of the availability of comparatively lower acquisition costs, coal resources amenable to open cast mining with shallow occurrence, lower freight cost for transportation to India, better coal evacuation facilities from mines to ports for export, and availability of vendors for undertaking mining operations.