Mercator to boost Indonesia coal output

Wed Mar 9, 2011 9:12am GMT

* Mercator traded 4 million tonnes Indonesian coal in 2010
* Oorja mine reaches 1.5 million tonnes output
* New high quality coal mine will add 2 million tonnes

NEW DELHI, March 9 (Reuters) - India's Mercator Lines Ltd (MRCT.BO: Quote) is to boost its Indonesian coal production to 3.5 million tonnes a year with a new mine, a Mercator executive said on Wednesday.

Speaking on the sidelines of a Coaltrans conference in New Delhi, he said Mercator's Ooorja mine in Petangis, East Kalimantan had also grown its output to 1.5 million tonnes a year of 5,400 GAD coal, which is largely shipped to India.

"We traded 4 million tonnes of Indonesian coal last year including our own mine production, the rest we bought from smaller players," the Mercator executive said.

"We mostly sell to traders who then export, only about 30 percent of our output is sold directly to Indian end-users," he said.

The new mine will begin operations this year and produce 2 million tonnes a year of 6,000 GAD coal.

The mine has 40 million tonnes of reserves, he added.

Mercator, India's second-largest private shipping firm, diversified into coal mining four years ago.

"The quality of coal we are producing is ideal for the Indian market but the new mine has higher quality coal, which could go to India or elsewhere in Asia," he said.

Mercator has mostly shipped in 50,000 tonne vessels but because it is one of the world's largest owners of gear grabber panamax vessels the company plans to graduate to panamax loading.

"This gives us a freight advantage with costs," he said.

(Reporting by Jackie Cowhig; Editing by Alison Birrane,sourced Thomson Reuters)