GMR to start coal mining in Indonesia next month

GMR Energy would start mining activity at its coal mine in Indonesia from next month. “The company would start extracting coal from one of the two separate blocks in South Sumatra, Indonesia next month,” according to a source.

In 2009, GMR Energy had acquired 100 per cent ownership of PT Barasentosa Lestari (PT BSL), a coal mining company in Indonesia, for about $100 million.

PT BSL is holding a legal coal mining licence under the Coal Contract of Work issued by the Government of Indonesia. The licence provides 25-year mining authorisation over two separate coal blocks in South Sumatra, Indonesia.

The company bought the coal mine with the purpose of securing fuel supplies for its thermal power projects in India. These acquisitions will also help in circumventing the volatility of fuel prices for its imported coal-based coastal power plants in India.

Meanwhile, the company has acquired a 33.5 per cent stake in Homeland Energy Group Ltd (HEG) which owns coal properties in South Africa through its subsidiary — Homeland Mining and Energy.

HEG owns a controlling interest in the already operational Kendal mines, fully explored Eloff mines and other exploration sites with total mineable reserves of around 300 million tonnes.

GMR Energy has also acquired 100 per cent ownership interest in EMCO Energy Ltd, (a subsidiary of EMCO Ltd), a public limited company. EMCO Energy is developing a 600-MW coal-based power plant in two phases (of 300-MW capacity each) at Warora in Maharashtra.

GMR Energy is operating a 200-MW coal-based project at Chennai in Tamil Nadu and is also constructing a 1,050-MW thermal project at Dhenkanal in Orissa which would be operational next year.

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