MEC Coal on track to start E. Kutai coal production in 2012
Thursday, August 12 2010 - 03:31 AM WIB
Raman Prabhakar said that the mine will initially produce 1 million tons per year and the output will be ramped up to 14 million tons in 2013, 23 million tons in 2014 and 34 million tons in 2015, which will be the peak production of the mine.
?Currently, we are selecting contractors for the mine. There are several candidates from inside the country and overseas. We hope to make a choice this year,? he said without giving a time-line and naming the potential contractors.
The coal will be sold to export as well as domestic markets, as MEC will follow the government?s regulation on the domestic market obligation, he said.
MEC Coal, which partners with UAE?s Ras Al Khaimah Investment Authority (RAKIA), will also develop a 130-km coal railway and port facility in Kutai.
One year after the construction of the railway starts, the company, teaming up with India?s Nalco, will start the construction of 1,400-MW mine-mouth power plant and aluminum smelter with capacity of 500,000 tons per annum. The facilities will be completed in 2014, MEC?s president of ifrastructure Thakur SB Singh told Petromindo.com in late May, this year.
He also said that the consortium will start construction of a 130-km coal railway and port facility in October this year with completion seen in 2012. The company expected to close financial deals and to appoint EPC contractor for the project in the third quarter of 2010.
In July 2010, United Arab Emirates' newspaper The National revealed that RAKIA was deferring investment in coal mining, aluminium smelting and railway complex in East Kalimantan
The newspaper quoted RAKIA CEO Khater Massaad as saying that the decision was made as it cools on a domestic coal-fired power project, adding that the move was in line with The Emirate?s strategy to pull back from overseas projects as it would concentrate on attracting foreign investment into the country.
However, in a separate article, the same newspaper quoted Sheikh Saud bin Saqr, the Crown Prince and Deputy Ruler of Ras al Khaimah, as saying that The Emirates are still studying how the project would directly tie in to its economy, but under the current plans, RAKIA may not have to put any substantial equity into the project.
But current plans for financing the first part of the project ? the $1bn railway and port ? show that RAKIA and Trimex will most probably not have to cover any of the upfront costs, said Madhu Koneru, the executive vice chairman of MEC Holdings, a Trimex subsidiary and RAKIA?s partner.
The partners expect to cover the equity portion of the investment with $250 million from Infrastructure Leasing & Financial Services (IL&FS), a fund backed by Indian state companies, a Japanese company and the Abu Dhabi Investment Authority. (denny)