NTPC wants to go solo on coal hunt

NTPC has started hunting overseas coal assets for long term off-takes, while considering to come out of International Coal Ventures (ICVL), which five PSUs formed for acquiring overseas coal assets.

Arup Roy Chowdhury, NTPC chairman, said the company was not yet out of ICVL but its purpose was not in sync with what ICVL was doing.

“Whatever assets ICVL identified assets were mainly coking coal assets — a requirement for the steel industry. In Indonesia, it located some thermal coal assets but the calorific value of those coal were between 5,100 and 5,700, which we generally don’t require. The Indonesian government has decided to ban exports of coal below the calorific value of 5,100, which could have been our requirement. So ICVL doesn’t serve our purpose,” Roy Chowdhury said.

He said it was not NTPC’s decision whether to stay in ICVL or not but it was up to the Cabinet to take a decision, since ICVL was formed at the decision of the Cabinet. “We have written to the Cabinet about our concerns and we will now wait for it to decide,” Roy Chowdhury said.

ICVL, formed by SAIL, CIL, RINL, NMDC and NTPC, was incorporated in May 2009 and was conferred the power of a Navaratna company for acquiring foreign coal assets. Although the company has not yet struck any acquisition, sources said it was carrying out due diligence of assets worth $1.2 billion at present. The assets were spread around in Australia, the US, South Africa and Singapore.

Roy Chowdhury said NTPC could go for hunting coal assets alone but it would be interested in such mines, which were either ready for production or were already producing.

Officials said the company could acquire stake in an operational mine or could strike a long term offtake contract.

Roy Chowdhury made it clear that whatever deal NTPC struck, it would not be supplies above 10% of its requirement. NTPC’s current coal requirement was 160 million tonnes (mt) which would go up to 240 mt by the end of the 12th Plan period. Supplies of coal should match its requirement and any deal struck would have to be framed accordingly.