Sajjan Jindal-controlled JSW Energy, which relies mostly on imported fuel, is scouting for coal blocks in South Africa and Indonesia as it looks to secure fuel supplies for its power plants in India, CEO and joint managing director Sanjay Sagar said.
The company is looking to buy an operating stake in a significant coal block, but hasn?t yet set its sights on any particular asset, Sagar told FE in an interview at the company?s Jindal House headquarters in Mumbai.
?Securitising coal is a very high priority, but that means acquiring an international asset which is not really available off the block,? he said.
?You have to hunt for these assets and our hunt is on. Our focus area would be South Africa and also Indonesia, if we see some stability in policy.?
If the company acquires a block in South Africa, it would hold a 74% stake in accordance with the country?s regulatory requirements, Sagar said.
India?s power producers, such as Tata Power, JSW and Adani, have been eyeing international assets to source coal for local power plants, as stagnating production at state miner Coal India has led to fuel shortages in the country. Coal accounts for a majority of electricity generation in India.
In November, Tata Power acquired 26% stake in Indonesian coal mine PT Baramulti Sukses Sarana Tbk to secure fuel supply to its upcoming power plants. Reports pegged the deal to be around R750 crore. Tata Power already has a 30% equity stake in Indonesia?s coal mines – PT Kaltim Prima Coal and PT Arutmin Indonesia.
But policy and tax law changes in foreign countries have hit Indian companies investing in coal blocks abroad.
In an interview with FE last month, Tata Power?s Anil Sardana called policy changes in Indonesia, where rules were applied with retrospective effect leading to higher coal prices, ?a shocker.?
JSW Energy also needs to consider the quality of coal, ease of mining and logistics of bringing coal to India, as it was not looking to trade the fuel, Sagar said.
Media reports earlier this year said JSW Steel had plans to transfer a thermal coal mine in Mozambique to the power arm, but Sagar said a lack of infrastructure in the African country makes such a move unlikely.
The company, which has an operational capacity of 2,00 MW, already has a stake in small coal block in South Africa, where one of the mines has already been exhausted. It is in the process of obtaining clearances for a second mine in the block, he said.
JSW Energy operates two power plants in Vijayanagar of 260 MW (coal & gas) and 600 MW (coal) each, a 540 MW lignite-based plant in Barmer in Rajasthan, and a 1,200 MW coal-based plant in Ratnagiri. It plans to expand the Ratnagiri plant with a 4X800 MW plant based on imported coal.
It is also planning a 1,320 MW power plant in Raipur, a 1,600 MW plant in West Bengal, and a 1,620 MW thermal power plant in Jharkhand.
Sagar said JSW Energy would dip into its cash reserves, as well as raise debt, if required, to finance an acquisition, but declined to reveal how much money the company would spend.
Media reports also recently said the company was in talks to buy a power plant in Karnataka from Lanco Infratech.
?We?re not in specific discussions with any project at the moment, including the Udupi plant,? Sagar said.
Griffin Coal to sign MoU with Qube for coal transportation
Hyderabad : Griffin Coal, the Australian subsidiary of Indian infra giant Lanco, is in advanced stage of negotiations with Australia-based Qube Logistics to sign an MoU for transportation of coal from mine to port, a senior official of Lanco Infratech said.
Qube is expected to ferry around 1.25 million tonnes of coal produced from Griffin Coal mine point to Bunbury port (in Western Australia) and the MOU is expected to sign soon, the official said. ?Currently Griffin Coal is producing around 3.75 MT and the MoU with Qube will see total production increase to about 5 MT in the next fiscal,? the official told PTI.
Lanco Infratech, through its step down Australian subsidiary, Lanco Resources Australia, took over Griffin Coal Mining Company and Carpenter Mine Management (Griffin Coal) for A$730 million in March last year.
Griffin Coal has recently not had any requirement to increase production of coal due to the absence of new domestic customers and the inability to raise funds for capital expenditure to export more than 7.5 lakh tonnes per annum.
PTI
