The Essar Group has signed a definitive agreement to purchase Aries coal mines in Indonesia. The deal gives Essar Power access to an estimated resource base of 100 million tonne of thermal coal and mineable reserves of 64 million tonne. The transaction is subject to regulatory approvals and is expected to close by April 2010. Early this month, the group company, Essar Global, had acquired a US firm, Trinity Coal Partners LLC, for $600-million from Denham Capital. The coal from Trinity would be used for the group’s steel plant operations in Algoma in Canada.

Essar Power is currently building six power projects in India, ramping up its power generation capacity from 1,220 mw to 6,100 mw by 2012. The Aries coal mines are located in the Kutai region of East Kalimantan in Indonesia. The high-quality bituminous coal has gross calorific value (GCV) of 6,000 with low ash and low moisture and is suitable for power plants. Production from the Indonesian mine is expected to start within a year. Essar Group director Anshuman Ruia said, ?The Indonesia mines are an excellent addition to our growing portfolio of coal assets. This acquisition adds another 100 million tonne to our existing thermal coal resource base of about 275 million tonne in India.?