The Hindu Business Line : NTPC may spend more on overseas coal assets

New Delhi, Jan 28 NTPC Ltd is looking to spend over $1 billion on buying coal assets abroad over the next few years as part of its efforts to secure long-term fuel linkages.

The generation major, which is in fairly advanced stages of scouting for opportunities in countries such as Indonesia and Australia, Nigeria, Mozambique and South Africa, has already earmarked around $125 million to be pumped into Coal Ventures International Ltd (CVIL) — a joint venture firm co-promoted by state-owned Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, Coal India Ltd and National Mineral Development Corporation.

NTPC, which generates over 28 per cent of the country’s total power, plans to nearly double its generating capacity to 50,000 MW by 2012, from 27,904 MW at present. “We are on the lookout and hope to strike a coal mine deal overseas during the current year as part of a long term measure to ensure fuel security for our coal-fired stations. We could be investing over $1 billion in securing assets abroad, including investments through CVIL over the next few years,” a senior company official said.

NTPC’s plans to invest in coal assets abroad come in the wake of a $1.3 billion deal by Tata Power Company to buy stakes in two Indonesian mines in April last year. The last couple of years have marked growing concerns among Asian utilities over the security of long-term coal supplies, with other utilities in the Asian region also scouting aggressively for assets in places such as Indonesia and Australia.

These include state-run Korea Electric Power Corporation (KEPCO), which recently clinched a 10 per cent stake in an Australian coal mine, and China Shenhua Energy, which is in preliminary talks to invest in Indonesia and is studying targets in Australia as well.

Hitherto, NTPC — the country’s largest power generator and biggest consumer of coal — has been depending on state-owned Coal India Ltd (CIL) and on coal imports from Indonesia to operate its coal-fired stations. NTPC’s coal consumption is expected to surge to between 185 million tonnes and 200 million tonnes a year by 2017, up from about 112 million tonnes.

The generation firm’s focus on securing coal supplies abroad comes in the wake of delays in its domestic coal mining foray.

The commissioning of the generation major’s first mine all set to miss a revised deadline of March 2008, with possession of land by NTPC for the project running way behind schedule and a proposed railway linkage to be built for moving coal out of the mine is facing tardy progress.

Of its cumulative capacity, NTPC operates 18 coal-fired projects with a cumulative capacity of 23,209 MW, while its remaining capacity operates on gas and liquid fuel.

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