India and Indonesia have agreed in principle to form a joint working group (JWG) for exploration and acquisition of coal assets abroad

NEW DELHI: India and Indonesia have agreed in principle to form a joint working group (JWG) for exploration and acquisition of coal assets abroad, Union Coal Minister Sripakash Jaiswal said here after his meeting with visiting Indonesian Energy and Mineral Resources Minister Purnomo Yusgiantoro, who is leading a delegation to India.

The meeting discussed the cooperation between the two countries in the coal sector and the way forward to strengthen the same.

Mr. Jaiswal said there was a great demand for coal in the country as the power sector was largely dependent on the mineral. He said India imported about 20 million tones of coal a year from Indonesia and his Ministry was looking at allocation of mining business licence or coal contract of work for new coal mining areas on a nomination basis, participation in government initiated tender process for grant of IUP (Mining Business Licence)/CCOW (Coal Contract of Work.

He said there was also a view for creation of a joint venture with government entry for acquisition, exploration and development of coal blocks in that country. The Indonesian Minister said that he looked forward to the setting up of a joint working group for coal which would meet either in New Delhi or in Jakarta soon to determine the further course of action.

Indonesia is a coal rich country with about 60 billion tonnes of coal resources and produced 140 million tonnes of coal in 2007 and is a main exporter of coal with 118 million tonnes of coal exports in 2007. India has been considering acquisition of properties in Indonesia for meeting the increasing demand of coal. Indonesia has been chosen as a preferred destination in view of availability of low ash high calorific thermal coals; comparatively lower acquisition cost; coal resources amenable to open cast mining with shallow occurrence; lower freight cost for transportation to India; better coal evacuation facilities from mines to reach ports for export and availability of vendors for undertaking mining operations.