JAKARTA: The UAE’s MEC Holdings said on Wednesday coal production from its Indonesian Kalimantan project will not start until 2012 after construction of a railway, versus earlier expectations of limited output starting this year.
The firm expects a railway from the mine to start operating at the end of 2012, when it will produce one million tons, before ramping up output to export 14 million tons in 2013, Madhu Koneru, the firm’s executive vice-chairman, told Reuters.
It is in talks with India’s top five private power producers, including Tata Power, and two Chinese firms for the output, with Indonesian domestic demand another possible future outlet, he said.
MEC told Reuters in December that it expected to ship two million tons of Indonesian coal this year to India, ahead of the railway’s completion, but it will now wait for the railway.
"We’re not doing a road, we’re putting all our effort into the railway," Koneru said in an interview in Jakarta, adding that rail construction had been delayed by six months but the firm had now got cooperation agreements for the necessary land acquisition.
He said the firm has appointed Standard Chartered as lead arranger for $750 million of project loan financing, which it expects to get within four months.
