Lanco close to deal on hiking coal prices in Australia

Written by Press Trust of India | Hyderabad | Updated: Nov 29 2011, 07:03am hrs
Lanco Infratech-owned Griffin Coals threat to halt coal supply to the Bluewaters Power Station in Western Australia unless prices are revised upward seems to have worked, with sources close to the development indicating an agreement might be inked within a fortnight.

The sources said there could a price revision in favour of Lanco with respect to the supply contract with Australian firm Griffin Energys Bluewaters, besides some upfront fee.

Earlier, Lanco had indicated its intention to hike prices of coal sold to the power plant and said it may suspend coal supply to the Bluewaters Power Station, which accounts for as much as 10 % of power generation in Western Australia.

Lancos move earned the wrath of the local administration, which threatened the Indian infrastructure major with a coal export ban.

However, All the issues with Bluewaters Power are settled. The company may formally announce the terms in two to three weeks time. There will be upward revision of coal price, sources told PTI.

As per the agreement, Lanco will have to supply 1.6 to 1.8 mt per annum to Bluewaters and according to experts, the coal price to Bluewaters could be in the range of 40 Australian dollars per tonne. When contacted, Lanco Infratech CFO J Suresh, without confirming the development, said talks are moving in a positive direction and the company cannot comment at the moment.