Indonesia’s coal mining law a blow for Indian units

The recent hike in coal prices have already spelt trouble for cement and power companies in India. Coal supply and coal prices are likely to suffer another massive blow, given new mining laws for coal in Indonesia. Indonesia, which is one the major suppliers of coal to India, now plans to cap its exports for domestic demand.

Analysts believe that cement and power companies have already planned their capacities over and above the potential coal supply from Indonesia. "Indonesia does not have the capacity to export sufficient coal to India. Moreover, Indian companies will now have to seek coal from other places. Since many cement companies as well as power producers from the coastal areas have tied up with Indonesia for coal supply, the shortage will adversely affect them,” said an analyst from a leading brokerage.
 
After issuance of a new mining law, the Indonesian government is planning to cap around 150 million tonnes coal exports annually from 2010 onwards. Given India’s high dependence on Indonesian coal, sectors like cement and power are likely to be hit adversely. Indonesia wants to secure coal supply for its domestic power plants under the 10GW fast-track project.
 
Cement industry players, on the other hand, are now desperately seeking help from the Indian government to tackle the coal shortage.
 
"We are in constant talks with the government for increasing coal allotments to the cement industry which has been brought down to 50% from 75%. We have been asking for 100% allotment. Now that we have a stable Union government in place, they will understand and support the industry," said R Gurumoorthy, spokesperson, Dalmia Cement Ltd.
-Amritha Pillay [email protected]
  • Like this story? Get our top stories by email.

    User 

    COMMENTS

    Edi

    1 decade ago

    india and indonesia will make good relationship in mining business

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    28 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 4 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)