Power behemoth NTPC is aggressively looking to acquire coal assets abroad to secure coal for its planned generation of 55,895 mw by the end of the 11th Plan period in 2012.

NTPC has an installed capacity of 29,894 mw. In the 11th Plan period it targets to add another 22,000 mw with a capital expenditure of Rs 55,000 crore. The power major has tied up with the State Bank of India for Rs 25,000 crore debt to fund part of the expansion.

Chairman RS Sharma said NTPC, which is running 15 coal-based power generating stations at present, has no shortage in the supply of coal for the capacity it is currently generating. But for the additional 22,000 mw it plans to generate, the company needs to hunt for coal assets across the world.

Besides betting on Coal India Ltd?s (CIL?s) increased production and International Coal Venture Ltd?s (ICVL?s) supplies from overseas coal blocks, for which it is presently scouting, NTPC is trying to acquire blocks to ensure that issues of coal supplies do not mar expansion plans.

Sharma said NTPC has identified blocks in Indonesia and Mozambique and the company is in the process of doing due-diligence for it. ?It is expected that CIL and ICVL will also acquire overseas coal assets and whosoever acquires, the coal will come to the country for supply to power generators,? Sharma said.

ICVL, a special purpose vehicle formed by five public sector companies, NTPC, CIL, Steel Authority of India Ltd, National Mineral Development Corporation Ltd and Rashtriya Ispat Nigam Ltd, is yet to acquire an overseas coal block though it has been hunting for it for over a year now.

Coal Videsh, a CIL department scouting for assets abroad for the last three years, has also identified two blocks in Mozambique with an estimated reserve of 1 billion tonne and will possibly take physical possession of the blocks in some months, CIL chairman Partha S Bhattacharyya said.

CIL, which has produced 403.73 million tonne in 2008-09 and plans to increase production in excess of 520 mt by the end of the 11th Plan period, has an annual contract of supplying 114.7 mt in 2009-10 to NTPC of the 306 mt it has committed to the Central Electricity Authority for supplying to the power sector. CIL has kept a target of producing 435 mt in 2009-10.

Sharma said NTPC will require 145 million tonne in 2009-10 with another 3,300 mw to be added above its current capacity of 29,894 mw including 2,749 mw commissioned in March 2009. In fact, of the 22,000 mw it wants to add by 2012, 2749 mw has already been commissioned and another 3300 mw is expected to be commissioned by the end of 2009.

To add the rest 15,951 mw, NTPC will require an additional 100 mt of coal supplies, which remains a challenge. Bhattacharyya said while NTPC?s power generation during the past 10 years has been growing at a rate of 6.4%, CIL?s growth in despatch of coal to NTPC grew by 7%.

Increasing supply of coal to NTPC would not be a problem if CIL?s targeted production of more than 520 mt by 2012 can be achieved. To meet this target CIL has planned and identified 134 new mining projects (34 underground mines and 100 open cast mines) at an investment of Rs 26,006.68 crore. But land acquisition and obtaining forest clearance are coming in the way of developing these projects.

Sharma said, ?There is no way NTPC can avoid coal imports to support country?s power requirement and it would be better if the required coal can be brought from our own foreign assets.?

NTPC imported around 5.6 mt of coal in 2008-09. In 2009-10 it might have to increase its import to around 15 mt. The power major will source 16-17 mt from Singareni Collieries Ltd this year, NTPC?s project director Chandan Roy said.

NTPC has been allotted six coal bocks expected to produce 48 mt per annum. The company is also going to sign a joint venture agreement with CIL this month for developing Brahmani coal blocks in Jharkhand, estimated to have a reserve of 1,100 mt. Bhattacharyya said a detail exploration of this block has been done and this would follow ?carving out projects.?

While Brahmani will be the first mining project for NTPC, for CIL it will also be its first project solely for the power sector. Sharma said the JV is likely to put up a 4,000 mw pit heat thermal plant at Brahmani after developing the mines.