NTPC to buy Australian coal mine

India’s largest power producer, NTPC, is set to acquire controlling interest in a 720-million-tonne coal field in Australia in a deal valued at $1-1.5 billion, which will enable it to fire about 3500 mw of power capacity.

The coal mines, located near Perth in western Australia, will allow NTPC to bring home up to 10 million tonnes of coal annually for its plants.“NTPC is in touch with a power producer in Australia that has expressed interest in selling the company’s assets that include a small power project, captive coal mine and large greenfield coal field,” said a government official privy to the development.“We have got some good offers from overseas coal mining companies recently. We are studying the proposals and taking information before negotiations begin on acquisitions,” NTPC CMD RS Sharma told.
The debt-ridden promoters (of the Australian project) may sell the 416 mw power project along with its captive coal mine separately from the virgin coal field.In this case, NTPC is likely to participate only for the greenfield coal project that will give it access to 7-10 million tonnes of good-quality thermal coal. The annual production from the field could go over 12 million tonnes per annum.“The company (NTPC) will place its bid once the mode of selloff is decided by its current owners later this month,” the official added, refusing to name the project or its promoters citing confidentiality clause associated with such talks.
A high-level delegation from the power ministry and NTPC, which is going to Australia this month, is expected to finalise the details of the proposal and would like to strike a deal at the earliest. Along with the Australian offer, NTPC is in advanced stages of discussion to pick up equity stakes in two coal fields in Indonesia, and is studying prospects of acquiring interest in two coal blocks on offer in Mozambique and one in South Africa.
NTPC needs about 125 million tonnes of coal annually for existing power plants and imports 10 million tonnes to meet the gap. The imports are expected to cross 30 million tonnes by 2017, forcing the company to look at alternative routes to build fuel security. It is already working on its eight captive coal blocks with peak production capacity of 83 million tonnes per annum.