NTPC to rope in global firm for mines buy in Indonesia

Written by Sanjay Jog | Mumbai | Updated: Mar 31 2009, 05:35am hrs
India largest generator NTPC with capacity of 29,500-mw has kicked off a process for an appointment of a global consultant to carry out due diligence of coal mines in Indonesia.

As reported by FE recently, NTPC is exploring various options which includes acquisition of at least 30% stake in the Indonesian coal mine or enter into a long-term agreement for the procurement of coal.

NTPC sources told FE on Monday, A high-level team has been sent to Indonesia recently and it has shortlisted various mines. The company proposes to invest upto Rs 2,000 crore for the purpose of acquisiton of stake or for a long term coal procurement arrangement. A global consultant will do the necessary due diligence and only after that NTPC wil complete its deal.

NTPC sources said the Indonesian venture is pursued to achieve fuel security. Currently, NTPC needs 150 million tonne coal and it imports 8 to 10 million tonne. Its import for 2009-10 is expected to 12 million tonne. NTPCs coal requirement in 2012-13 is estimated at 225 million tonne and the company will have to import nearly 20-25 million tonnes. NTPC plant boilers have a blending capacity of 9 to 10%. The Indonesian deal will help meet NTPCs coal requirement. Besides, NTPC is engaged in the development of five captive coal blocks. Analyst said NTPC has joined the bandwagon by selecting Indonesia as a favoured destination for acquisition of coal mine or striking a long term deal.