Tuesday, June 30, 2009

India to RE - Develop 18 Coal Mines

By Gaurav Singh

June 30 (Bloomberg) -- Coal India Ltd. short-listed ArcelorMittal, the world’s biggest steelmaker, and nine other companies to develop its abandoned mines to help ease a shortage of the fuel in the country.

State-owned Coal India is offering 18 of its abandoned mines for development, Chairman Partha S. Bhattacharyya said by telephone, confirming a report in the Business Standard newspaper today. The offered mines hold combined reserves of 1.6 billion metric tons, Bhattacharyya said.

Finding partners for the mines may help Coal India, the country’s monopoly miner, raise production by 29 percent within three years and allow the nation to avoid costly imports to meet the fuel needs of power plants. India aims to add 13,000 megawatts of new capacity every year, President Pratibha Patil told parliament June 4.

“Our portion of the equity will largely be the mines,” Bhattacharyya said. “The partners can have 50 percent of the coal provided they have customers in the country.”

Rio Tinto Group, JSW Steel Ltd., GVK Power & Infrastructure Ltd. and Essar Mineral Resources Ltd. were also short-listed, according to the Business Standard report. Ian Head, a spokesman for Rio Tinto, wasn’t immediately available when contacted by Bloomberg at his Melbourne office.

Coal India aims to complete the bidding process by the year-end and will offer as much as half of the equity in the ventures to its partners, Bhattacharyya said. The company invited separate bids for the mines, owned by three of its units, he said.

Coal Shortages

India’s coal shortage will be about 228 million tons by the year ending March 2012, J. Goel, chief general manager of sales and marketing at Coal India, said on Feb. 24. Demand is estimated to reach 731 million tons a year by then, according to government estimates.

Coal India produced 403.7 million tons of the fuel in the year that ended March, data on the company’s Web site show. The company signed a 20-year agreement on May 29 to supply fuel to the coal-fired plants of NTPC Ltd., India’s biggest power producer.

To contact the reporter on this story: Gaurav Singh in New Delhi at gsingh31@bloomberg.net

No comments: