KOLKATA (miningweekly.com) - India and Indonesia were likely to revive a joint working group on coal to resolve issues surrounding Indian investments in Indonesia’s mining industry.
The decision to revive the joint task force followed Indian Prime Minister Manmohan Singh’s visit to Jakarta, where both sides agreed that out of mutual interest, issues surrounding Indian investments in the Indonesian mining sector needed to be addressed and resolved, a Coal Ministry official said.
The joint working group has not met over the last two years.
Indian investment problems in the Indonesian coal sector included international pricing, lack of a stable regulatory regime and export policy.
The Indonesian government has responded favorably to India’s concerns, agreeing to its suggestion of a joint forum to push ahead with resolution of these investment roadblocks, the official said.
As a follow-up to the high-level India-Indonesia talks, it was decided that the existing joint working group would need to be revived and used as a forum between the two countries if required, and that the composition of the working group could be expanded to include representatives from finance, commerce and mining from the respective governments to delve into the issues in a holistic manner, the official added.
Several Indian companies like Tata Power and Reliance Power have set up ultra mega power projects in India linked to imported coal from Indonesia, and quantitative and qualitative restrictions imposed by the latter government have severely impacted the financial viability of these projects, forcing the government to permit these projects to revise their tariffs with power distributing companies.
Indian investments in Indonesia were pegged at around $15-billion, predominantly in the country’s mining sector and resolution of the pending issues held the potential of a further $15-billion in Indian foreign direct investments into the South East Asian country, officials said.
About 80% of Indian coal imports of 110-million tonnes were sourced from Indonesia and imports were projected to rise to 180-million tonnes by close of the current fiscal year.