The UAE's MEC Holdings said its Indonesian Kalimantan project will not start significant coal production to meet Chinese and Indian demand until 2013 because of delays to its project to build a railway from the mine.

The firm expects the railway to start operating at the end of 2012, when the coal mine will produce one million tonnes, before shipping 14 million tonnes in 2013 to Asian utilities, Madhu Koneru, the firm's executive vice-chairman, told Reuters.

He said the firm is in talks with India's top five private power producers, which could include Tata Power and JSW Energy, and two Chinese firms for the output, with Indonesian domestic demand another possible future outlet.

MEC told Reuters last Dec that it expected to ship two million tonnes of Indonesian coal this year to India, ahead of the railway's completion, but it will now wait for the railway as utilities plan their expansion around securing coal supplies.