MEC in talks with Tata Power on coal-trade

The UAE's Middle East Coal is in talks to supply coal to Tata Power, India's biggest private sector power firm, from its new Indonesian operations, an industry source said on Wednesday. The long-term supply deal would be in exchange for an equity stake in Tata, the India-based source who is familiar with the talks, said. Middle East Coal (MEC) is a joint venture between United Arab Emirates' investment fund RAK Minerals and Metals Investments (RMMI) and UAE-based mining company Trimex. MEC plans to start operation of coal mines in Indonesia's coal-rich East Kalimantan province this year with initial production of 2 million tonnes destined for India. The supply deal would help MEC find the $500m in financing it needs for the project which has an estimated cost of $1bn. MEC plans to start shipments of 3 to 5 million tonnes of thermal coal via road. Once the rail project is complete, shipments would rise to 17 million tonnes. Of the 17 million tonnes, 10 million would be shipped to India, 7 million to China and the remaining two million tonnes to the UAE's northern emirate of Ras al-Khaimah, home to RMMI.