The Economic Times - 24-Oct-07
NTPC mines Indonesian JV to secure coal linkage
PSU major NTPC may enter into a power and coal joint venture (JV) with an Indonesian company as part of its initiative to expand global operations and secure coal linkage for its power plants. The company is in talks with Indonesian mineral company PT Tambang Batubara Bukit Asam Tbk (PTBA) for entering into a JV where NTPC would help the company in its proposed power foray and also jointly mine coal for use by the PSU.
“A delegation from NTPC is expected to visit Indonesia soon to hold final discussions with PTBA for a possible joint venture. If the talks succeed, the two sides could sign a MoU for development of a thermal power plant and a coal mine,” a source in the ministry of power said.
Senior NTPC officials have already met PTBA representatives in Indonesia in September this year. NTPC chairman and managing director T Sankaralingam has now written to president director of PTBA Sukrisno expressing his desire to sign an agreement on mutually beneficial business model.
Sources said that NTPC is interested in setting up two JV operations with PTBA — one for providing engineering support for developing a power plant and another for developing a coal mine that would allow the PSU to bring a portion of the production for use in its power plants. PTBA has recently won tender for constructing a power plant and has indicated that it would grow this business.
It is expected that the coal deal with PTBA would mainly be used by NTPC to feed its proposed 500 mw power plant in Sri Lanka based on imported coal. A portion of the coal may also be brought back to India.
NTPC has been scouting for coal blocks in Indonesia , Australia and South Africa to meet its domestic demand. The demand for coal is expected to shoot up sharply as NTPC intends to become a 50,000 mw company (from the current 27,904 mw) by 2012.
Last year (2006-07), NTPC used 2.43 million tonne (mt) of imported coal out of its total requirement of 111.02 mt. The power PSU is focusing on Indonesia due to its proximity to the country as well as huge reserves of good quality thermal coal.
PTBA is the sole state-owned coal mining company in Indonesia and owns two of the largest coal mining sites Tanjung Enim and Ombilin. It produces over 10 mt of coal annually, 25% of which is exported to countries such as Malaysia , Taiwan and Japan .