Raises stake in Australian coal miner Resource Generation by 4.8% to 14.8%

Friday, Jun 10, 2011, 1:15 IST
By Sumit Moitra | Agency DNA

Kolkata: CESC, the power utility from the RPG group stable, is hungry for coal as it works on a fast pace to execute new coal-based power plants at a time when country’s principal supplier of coal, Coal India, is floundering in keeping up supplies.

The company has decided to import 1 million tonne of coal over the next two years to augment its requirement primarily sourced from its own domestic mines and from Coal India, an official of CESC told DNA.

“We have just floated expression of interest for our requirement of imported coal for the next two years,” he said.

CESC’s coal mining subsidiary, Integrated Coal Mining that owns captive coal mine at Burdwan in West Bengal meets half of CESC’s total coal requirement of about 6 million tonnes a year. The balance is met through supplies from Coal India.

“With Coal India raising prices of quality grades significantly we are now looking at imports which we are hopeful of doing at competitive rates,” the official said.

About 20% of CESC’s total coal requirement consists of grades A & B varieties, prices of which were raised by a sharp 150% in February while another round of hike for lower grades of coal is in the offing in September when Coal India goes for wage hike for its huge workforce.

“For us, landed cost of imported coal would be competitive in the current scenario,” the official said.

To raise coal availability, CESC will also be participating in domestic coal block auction by the government expected shortly. Within the next two years CESC would be commissioning 600 mw capacity at Chandrapur in Maharastra while by 2016 600 mw each at Haldia in West Bengal and at Dumka in Jharkhand apart from 1320 mw at Dhenkanal in Orissa would go on stream, significantly pushing up CESC’s coal requirement.

Overseas, CESC has control over quality bituminous coal in South Africa belonging to a mine of Australian stock exchange-listed mining company Resource Generation Ltd.

CESC acquired 10% holding in August 2010, and on Tuesday, it picked up another 4.8% via subsidiary Bantal Singapore Pte Ltd.

“By raising our stake we have revised our coal offtake pact with them. From an earlier right to 37 million tonne over 20 years, we will now have access to 139 million tonne over a period of 38 years,” the official said. (sourced DNA)