Madhu Koneru speak at MENA Mining Congress 2008

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Madhu Koneru speak at MENA Mining Congress 2008

• Madhu KoneruExecutive Vice Chairman
• MEC Coal

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Madhu Koneru speak at MENA Mining Congress 2008
"GCC Governments must invest in securing mineral
resources to hedge against rising price of
infrastructure developments or risk being
affected by energy shortfalls and price
spikes,"says Madhu Koneru. Landscape According
to the Federation of Gulf Cooperation Council
(GCC) Chambers of Commerce and Industry,
the GCC domestic product will grow by 27.9 this
year to reach 1 trillion with the increase in
oil prices. Global energy needs are projected
to grow by 55 between 2005 and 2030, at an
average annual rate of 1.8, with almost half of
the growth due to soaring demand in China and
India. Fossil fuels will account for 84 of the
overall increase in demand between 2005 and 2030
and Electricity use will nearly double, with most
new plants burning coal. Coal is already being
touted as an alternative energy source to oil
the UAE imported nearly 500,000 tonnes of coal in
2007, most of which, was destined for energy
supply.
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Madhu Koneru speak at MENA Mining Congress 2008
Challenge With the current boom, comes a demand
for energy and infrastructure. This has seen
spiraling costs due to commodity price
fluctuations, causing huge inflation and as a
result causing many infrastructure projects to be
re-assessed in the private and public sectors.
This problem continually leaves
the GCC governments open to being affected by any
price fluctuations and with the Middle East's
coal usage projected to reach 0.5 quadrillion Btu
by 2030 (source IEA) this could become a serious
problem.In the private sector manufacturers and
metals processing plants are heavily dependant on
the availability of electricity and closing this
energy gap is a key issue for them. Aging
less-productive oil fields and resistance among
major oil exporters to build spare oil capacity
will make crude oil and natural gas more
expensive. There is a need for developing
countries to turn increasingly to coal as fuel.
(IEA)
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Madhu Koneru speak at MENA Mining Congress 2008
Solution Total Indonesian coal exports grew from
53.4m tonnes in 2000 to 181m tonnes in 2007 with
Indonesia now the world's fourth largest producer
of coal and the largest exporter of thermal coal.
Indonesia is expected to produce 205 million
tonnes of the fuel in 2008, with domestic demand
seen at 52 million tonnes and the rest set for
export, according to energy ministry data. The
argument for coal has already been set with it
being a more manageable energy commodity that is
more scalable than oil for electricity generation
and more affordable and cost effective than Oil
Gas but what remains to ensure against is the
negative affects of price fluctuations. Direct
investment in coal mining is a solution which
minimizes any impact that price spikes can
have. Already the Ras al-Khaimah government is
investing heavily into coal as an alternative
viable energy source through RMMI, enabling them
to bridge current energy gaps. The strategy of
which is to gain a foothold directly at the
source of the commodities in resource rich
regions directly hedging against future
infrastructure costs.
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Madhu Koneru speak at MENA Mining Congress 2008