HomeEnergy MineralsAsia looks to Mozambique for coal mines

Asia looks to Mozambique for coal mines

An NTPC Limited
power station in India
 
New Delhi, India — MININGREVIEW.COM — 14 July 2010 – Asia’s second-biggest electricity generator by market value “’ NTPC Limited “’ is seeking to buy coal mines overseas to help source as much as 67% of the company’s current imports of the fuel, and Mozambique is a prime destination.

Revealing this in a telephone interview with Bloomberg News from here, chairman R.S. Sharma said the utility would use part of its US$3 billion (R22.5 billion) in cash reserves, and also raise debt, to fund the purchase of mines in Mozambique, Australia and Indonesia that can supply as much as 10Mtpa of coal.
 
“Having your own mines, above all, ensures consistency of supplies,” said Novonil Guha “’ a Mumbai-based analyst with Brics Securities who has an “outperform” rating on the stock. Having their own mines shields them from being exposed to the volatility of international coal prices.”

Indian energy companies are seeking to acquire assets across the world as demand from the country’s 1.2 billion people rises and companies build more factories. State-owned Coal India Limited “’ the world’s largest producer “’ may also buy mines abroad to supply the equivalent of 8% of domestic output, according to additional secretary to the coal ministry Alok Perti.

“Imports are rising at 10% every year and it makes sense to have our own mines overseas from where we can bring good quality coal,” Sharma said. “We shouldn’t have any problems funding these acquisitions. NTPC imports about 15Mt of coal every year, he said.

Coal demand in India, Asia’s third-largest energy consumer, may double from 2008 to 2015 to exceed 1 billion tonnes.

India proposes to add 78 000 megawatts of electricity-generating capacity in the five years to March 2012 and 100 000 megawatts in the following five years.

LATEST FEATURES