Thursday, August 23, 2007

JSW yet to secure long-term coal supply

Rising prices upset power cos' hunt for coal assets abroad

20 Aug, 2007, 0622 hrs IST, PTI

MUMBAI: Indian power utilities are finding it increasingly difficult to acquire coal assets abroad as their prices are hotting up with each passing day. This is true for particularly coal assets in Indonesia, Australia and Mozambique where Indian companies are scouting for acquiring mines because of freight advantages.

India aims to set up five UMPP (ultra mega power projects) of 4,000 MW capacity each with imported coal. These projects would require more than 75 million tonnes of coal a year. Besides, several other private players require an equal amount for other projects in the pipeline.

Due to sudden spurt in demand from India for imported coal, several countries are raising prices. “Coal miners in Indonesia, Australia, Mozambique and Africa know that India needs coal to fuel its upcoming power and steel projects.

They also know that many within the country are fighting among themselves to acquire these assets,” Raaj Kumar, MD, JSW Energy said. “This has created a price inflation and there is no signs of stabilising that.” he further added. Other sources said the difficulty was that there are very few assets on sale in these countries, but there are many takers which was fuelling their prices.

The situation is so grave that Kumar’s own company, which has received financial closure for Rs 4,500 crore, 1,200 MW thermal power project at Ratnagiri in Maharashtra is yet to secure long-term coal supply from abroad.

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