Economy

First shipment of US coal under $7-b export deal to set sail for India next month

PTI Washington | Updated on August 22, 2012

The first shipment of coal for India is in the works under the $7-billion export deal between the US-based FJS Energy and the Abhijeet Group.

The shipment will depart from New Orleans Port in Louisiana for India next month.

The deal — the first of its kind between private companies of the two countries — would enable shipping of 9 million tonnes of American coal annually from the mines of Kentucky and West Virginia for the next 25 years and is aimed at addressing the power shortage in India.

“It’s no secret that the coal industry is in a state of flux in America what with erratic market conditions, the uncertain regulatory atmosphere and the ever-changing energy picture,” Kentucky’s Governor Steve Beshar said.

“But international markets need coal and this private partnership is a great example of a new market for Kentucky resources,” he added.

“My administration has worked hard to strengthen ties with India, and we’re looking forward to a long and successful partnership with many more economic opportunities,” he had said after the agreement was signed on August 15.

The multi-billion deal was signed between New Jersey-based FJS Energy LLC and India’s Abhijeet Group, which has several projects in the power and ferro alloys sector where they will be using the American coal.

“To our knowledge, a 25-year coal provisioning transaction in the Indian private sector is the first of its kind. Further, we understand that this will be the first-ever long-term US coal export to India. Till date very few shipments of US coal have taken place to India,” an official from FJS Energy familiar with the deal told PTI.

The coal exported from the US is to meet the current shortfall in coal linkage as well as the 30 per cent import coal policy for where coal linkage might be available.

The US coal together with those available to Abhijeet from coal linkage within India can generate approximately 5,000 MW.

“The deal with the Indian group, besides strengthening trade and business relationship between both the countries, will benefit both the companies optimally,” said FJS Energy’s Chairman of the Board and former Chairman of Coal India, M. P. Narayanan.

Anand Kumar, Executive Director of Abhijeet Group said this partnership is an example of the strong potential between American producers and Indian customers





Published on August 22, 2012

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