New Delhi, Sept. 9: The government is hopeful of Indonesia allotting coal blocks to Coal India.

“Discussions with the Indonesian minister have raised hopes that Jakarta is keen to strengthen energy ties with India. They can allot blocks to Coal India on a nomination basis,” coal minister Sriprakash Jaiswal said today.

He said talks with Indonesia were at a preliminary stage, but there were enough signals to feel optimistic.

Jaiswal said his ministry was hopeful that Jakarta would allocate a coal block mining licence and coal contract of work to CIL for new mining areas on a nomination basis. He said the two countries had agreed, in principle, to set up a joint working group.

India imports about 20 million tonnes of coal every year from Indonesia. The Southeast Asian nation is a coal-rich country with about 60 billion tonnes of reserves. It produced 140 million tonnes (mt) in 2007 and is a major exporter, with 118mt of exports in 2007.

Coal India, which hopes to produce 435mt in the current fiscal, had an output of 154.6mt during April-August 2009 compared with 140mt in the corresponding period last year.

India has been considering the acquisition of properties in Indonesia for meeting its growing demand for coal. The coal in the island nation is of low ash and high calorific quality, and the cost of acquisition is low.

The demand for coal during the current fiscal is expected to rise 10 per cent from a year earlier to 604mt, according to government forecasts. About 70mt will be met through imports, which will nearly double in five years.

Coal India plans to import 50mt of thermal coal a year from Australia, Indonesia and Mozambique from 2016-17 to cover an increase in demand for power, CIL chairman Partha Bhattacharya has said.