Close on the heels of inking a deal to buy a coal mine in the US, the Essar Group has signed a definitive agreement to purchase Aries coal mines in Indonesia to source coal for its power projects in India.
The transaction amount is $175 million (Rs 805 crore) to $200 million (Rs 920 crore). The transaction is expected to close by April 2010.
The deal gives Essar Power access to an estimated resource base of 100 million tonnes of thermal coal and reserves of 64 million tonnes.
“The Indonesia mines are an excellent addition to our growing portfolio of coal assets. This acquisition adds another 100 million tonnes to our existing thermal coal resource base of about 275 million tonnes in India,” said Anshuman Ruia, director, Essar Group.
At present, Essar Power is building six power projects in India, to ramp up its power generation capacity from 1,220 MW to 6,100 MW by 2012.