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Mr Gautam Adani

Pratim Ranjan Bose
Virendra Pandit

Ahmedabad, Sept. 7

Keeping in tune with its ambitious plans to set up a 10,000-MW, coal-based thermal power capacity by 2011-12, the Adani Group is in an advanced stage of negotiation to acquire more captive thermal coal blocks in Indonesia.

The Adanis currently have a low-sulphur and low-ash coal block with 140 million tonnes of geological reserves in Indonesia, which was recently brought into production. Applications are also submitted to the Indian Coal Ministry for offering captive linkage to the upcoming 4,620-MW facility of Adani Power Ltd at Mundra in West Gujarat.

“We are looking for acquisition of more coal reserves in Indonesia and are in an advanced stage of negotiations with a few parties,” the Group Chairman, Mr Gautam Adani, told Business Line in an interview here.

“We prefer Indonesia as a destination due to its proximity to the Indian shores resulting into lower freight cost and voyage time,” he said. The alternative destinations under consideration are in Africa.

According to Mr Adani, the Group is aiming to have a captive coal reserves — having an annual production capacity of over 40 million tonnes in the next five to six years.

The existing captive reserves in the island of Bunyu in E. Kalimantan in Indonesia, near the border of Malaysia to the North, were brought into production about four months back.

The mine is currently producing at a capacity of 1 mtpa (million tonne per annum), which is sold to other power producers in India.

The capacity is slated to be enhanced to 2 mtpa by December 2008, when the first unit (330 MW) at Mundra is slated to start production.

“The production from the Indonesian mine is slated to reach at 8 mtpa before the entire 4,620 MW capacity at Mundra is commissioned in 2011,” Mr Adani said. The mine is operated in collaboration with local partner PT lamindo Inter Multikon.

According to the group Web site, Indonesia being the seventh largest coal-producing country in the world. Sumatra contains roughly two-third of Indonesia’s total coal reserves, with the balance located in Kalimantan, West Java and Sulawesi.

Adani have already ordered two cape-size vessels to ferry coal from Indonesia. The vessels will be delivered in 2009-end.

More Stories on : Coal | Overseas Investments | Mergers & Acquisitions

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