Business Daily from THE HINDU group of publications
Sunday, May 20, 2007
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Business Daily from THE HINDU group of publications Sunday, May 20, 2007 ePaper |
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Power Corporate - Overseas Investments Industry & Economy - Coal
Anil Sasi
`Fuelling' more Indonesian deal will meet 50 per cent of company's requirements Rest to come from new sources for upcoming coal-fired stations
New Delhi May 19 On the heels of Tata Power Company's announcement to pick up minority stake in coal mines in Indonesia, the private power major is looking at Australia and South Africa for securing additional supplies for upcoming projects in India. The additional sourcing could be by way of purchasing equity in mines and entering into offtake contracts. Tata Power, which picked up stake in two large coal producers in Indonesia in end-March, plans to cap its supplies from those mines at 50 per cent of its projected requirement of 21 million tonnes (mt) per annum, a company official said. The company — the country's largest private power player — is looking at similar arrangements in countries such as Australia and South Africa for the balance imported coal required for its upcoming coal-fired stations, including the Rs 16,000-crore Mundra Ultra Mega Power project. Tata Power had signed a $1.1-billion deal on March 31 to buy 30 per cent stake in two major Indonesian thermal coal producers, and in related coal trading firms, all promoted by Indonesian energy and mining major PT Bumi Resources Tbk.
Cap on sourcing
"The Indonesian deal is expected to take care of 50 per cent of Tata Power's imported coal requirements, while the rest could come from new sources. From a risk perspective, the company has plans to cap its sourcing from a single country at 50 per cent of its overall coal requirements," a company executive said. Of the overall requirement of 21 mt of coal for fuelling Tata Power's 7,000-MW capacity addition plan over the next five years, the 4,000-MW Mundra project would require about 12 mt. The rest would be required for its other projects, including its project in Trombay and a coastal project coming up in Maharashtra.
Stake details
PT Kaltim Prima Coal and PT Arutmin Indonesia, which are among the coal producers where Tata Power picked up stake, together produced 53.5 mt in 2006, of which 95 per cent was exported. Tata Power's offtake agreement with Kaltim Prima Coal entitles it to purchase about 10 mt of coal per annum. The transaction also includes 29.98 per cent shareholding each in PT Indocoal Kalsel Resources, PT Indocoal Kaltim Resources and in Indocoal Resources (Cayman) Ltd. "The move to pick up stake in Indonesia secures a major portion of our fuel requirements in the light of the aggressive growth plans of the company. We are continuously on the lookout for similar opportunities elsewhere," he said. Tata Power currently operates an installed generation capacity of over 2,300 MW and has a presence in all major segments of the power sector — generation, including thermal, hydro, solar and wind, transmission and also distribution. The company had reported a net profit of Rs 604.07 crore and revenues of Rs 3,770.61 crore during the first nine months of 2006-07.
Related Stories: More Stories on : Power | Overseas Investments | Coal | Tata Power Co. Ltd
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