HomeWorld BusinessIndia’s power generator seeks coal assets in SA

India’s power generator seeks coal assets in SA

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KOLKATA — After pulling out from the race for Australian coal miner Bandanna Energy, India’s largest thermal power producer NTPC Limited is seeking to acquire coal assets in South Africa.

Simultaneously, to cope with shortage of coal feedstock from domestic mines, NTPC was also considering entering into long-term contracts with mines in SA for import of coal that would start at levels of four million tonnes a year and ramped up to 16 million tonnes a year, over a period of time.

NTPC pulled out from bidding for a stake in Bandanna Energy, perceiving the price to be too high. The total capital expenditure on the mines was estimated at $3 billion along with related infrastructure like railway connectivity to evacuate the coal and this was perceived by the company to be too high, NTPC officials said.

“Return on capital and investments or appreciation in coalmines are very difficult to know in advance. We don’t know how it will behave. It is very speculative,” NTPC chairperson and MD Arup Roychowdhury said.

“Supplies through long-term contracts provide assured quantities of coal at predetermined prices. We will have to give priority to domestic sources of coal, but to bridge the gap between supplies and our projected captive demand, we will have to acquire mines overseas,” Roychowdhury said.

“South Africa is our preferred destination for securing coal supplies and assets. There are lot of bilateral initiatives between the governments of India and South Africa and these have got further impetus following visit of Deputy minister of Trade and Industry, Elizabeth Thabethe,” NTPC official said on condition of anonymity since not authorised to speak on the issue.

“As a government owned company, NTPC naturally is comfortable in following up Indian government policies in promoting bilateral cooperation between India and South Africa. An acquisition of coal asset in that country should ensure supplies of at least 25 years,” the official said.

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