RPower buys 3 coal mines in Indonesia
Anil Ambani-controlled Reliance Power Ltd has acquired three coal mines in Indonesia in an attempt to produce power at a cheaper cost, reports Indulal PM.business Updated: May 02, 2008 23:07 IST
Anil Ambani-controlled Reliance Power Ltd has acquired three coal mines in Indonesia in an attempt to produce power at a cheaper cost. Coal from Indonesian mines will be used for power generation in Maharashtra and Andhra Pradesh.
The company, however, has not disclosed the valuation for the acquisitions. A Reliance Power release said the company plans to invest $1 billion (Rs 4,100 crore.) for the expansion of these mines. The announcement had little impact on the company’s share price, which closed at Rs 396.75, up 0.62 per cent, on the Bombay Stock Exchange on Friday when the benchmark Sensex was up 323.96 points to close at 17611.27.
With the company laying the ground for getting additional coal, it proposesto set up another 4000 MW-coal fired power plant in Gujarat or Tamil Nadu. "Now we have additional linkage to coal. We are planning to set up another 4000 mw capacity," said J P Chalasani, CEO of Reliance Power. After the proposed expansion plans, the company’s total power generation capacity will reach 32,200 MW.
As coal-based power plants are becoming more attractive due to lesser cost of production, power generation companies are trying to acquire mine assets across the globe, according to analysts. Last year, Tata Power paid $1.1 billion to pick up 30 per cent stake in two Indonesian coal mines owned by PT Bumi Resources. Currently India has a power shortage of over 75,000 MW. The Union power ministry is targeting to produce one lakh MW over the next five years.
"With the announcement of ultra mega projects and the current power shortage scenario, companies are looking for cheaper source of power generation and this makes coal the most preferred option," said a Mumbai-based analyst working with institutional broking firm Edelweiss Securities. Reliance Power has acquired mines which are situated in the South Sumatra region of Indonesia.
The mines are estimated to house over 2 billion metric tonne of coal reserves, spread over 40,000 hectors. They include SreeVijaya Bin Tank Piga, Brayayan Bing Tang Tiga NLG and Sujico Pensdragon Energy, which are currently owned by mine concessionaires of Indonesia.