Dubai-based coal trader Coal & Oil (C&0) expects its coal purchases from Indonesia to increase by at least 20 percent next year, from 5 million tonnes this year, due to strong Indian demand, the firm’s founder president said.

The firm is also seeking to buy new mines in Indonesia to secure coal
supply for its new power plant, which is expected to start operation in
2012, Ahmed Buhari said late on Thursday.

“There’s going to be more imports in the next 3-4 years, because of a
slowdown of coal production and expansion of power capacity in India,”
Buhari told reporters on the sidelines of the opening ceremony at
C&0’s new office in Jakarta.

“We expect to export 5 million tonnes of Indonesian coal this year and
next year it will increase by at least 20 percent,” he said.

India’s coal imports have grown rapidly from almost nothing five years
ago to a projected 70 million tonnes in the next fiscal year. Imports
will continue to rise fast over the next 10-15 years because domestic
supply cannot meet demand.

Privately-owned C&O, founded by Buhari in 1998, is one of the key
players in the subcontinent. The company sells more than 6 million
tonnes of imported coal a year and has supply agreements with major
producers in Indonesia, South Africa and Australia.

The firm also plans to invest around $300 million within the next 3-5
years to buy mines in Indonesia as it seeks to secure coal supply for
its 1,200-MW coal-fired power plant in Tuticori in Tamil Nadu at
southern India, Buhari said.

“We are looking at buying (new mines), joint-venture, financing and offtake agreements, anything,” he said.

The power plant is designed to use low-quality Indonesian coal.

The firm is currently in talks with a number of Indonesian coal miners
for possible joint-venture agreements, but Buhari declined to give
details

With the new power plants and growing demand, C&O expects to import
20 million tonnes of coal within the next 5 years, with Indonesian coal
accounting for 70-80 percent, he said.

Source: Reuters

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