Indian company investments in overseas coal mines

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Indian company investments in overseas coal mines include investments in Australia and Mozambique.

Investments in Australian coal mines and export infrastructure

  • In August 2010 Adani Mining, a subsidiary of Adani Group bought Linc Energy's Galilee coal tenement for $A500 million in cash plus a $2 per tonne royalty (indexed to the Consumer Price Index) for the first twenty years of coal production. According to Linc the Galilee tenement an indicated resource of 500 million tonnes and a further 7.3 billion tonnes as an inferred resources. The company claims that the "tenement is capable of producing up to 60 million tonnes of coal per year once fully operational."[1]
  • In March 2011 Lanco Infratech Ltd’s bought the Griffin Coal Mining Co. Pty Ltd’s coal mines in Western Australia for A$750 million. The report stated that "Lanco plans to boost almost four-fold to over 15 million tonnes per annum, in addition to adding rail linkages, and expanding facilities at Bunbury port." The coal, aside from that produced domestically, would be exported to feed Lanco's proposed major increase in coal-fired power plants it owns and operates in India.[2]
  • In May 2011 another Adani Group subsidiary paid $1.829 billion for the 99-year lease of the Abbot Point Coal Terminal in North Queensland. Mundra Port Pty Ltd, an Australian subsidiary of Mundra Port and Special Economic Zone Ltd, which in turn is a subsidiary of the Adani Group, had won the tender bid for the lease over the X50 terminal - which has the capacity for 50 million tonnes of coal a year.[3]
  • In mid-June 2011 it was reported that an agreement had been reached for GVK Power and Infrastructure to purchase the Alpha and Kevin's Corner projects for $2.4 billion. "The individuals have signed, but the companies haven’t. It will take around a month for the complete paperwork to be completed. A formal announcement is expected shortly after that,” an anonymous GVK executive told the Wall Street Journal. It was reported that GVK would pay $1.25 billion at the time the agreement was formally signed off on with a further two equal instalments. There was no mention of Hancock retaining a share in either project.[4]

Investments in Mozambique coal mines and export infrastructure

  • Coal India Limited has established a wholly owned subsidiary, Coal India Africana Limitada (CIAL). CIAL is currently undertaking a drilling program on two exploration licences in Tete province. The company has suggested that it could begin production in 2016/2017 but this is contingent on the development of export infrastructure.
  • In 2012 Essar Energy's website stated that it planned for coal from the company's "captive coal mines in Indonesia and Mozambique" to be used for stages 1 & 2 of its own 3,000MW Salaya power plant in Gujarat, India. Essar's only coal project in Mozambique is the Cambulatsitsi mine.`[5] However, as of June 2013, the company now no longer mentions Mozambique as a supplier for the power station.[6]

Investments in Indonesian coal mines and export infrastructure

  • In March 2007 Tata Power purchased a 30% stake in two coal mines owned by Bumi Resources --PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin). The deal was for approximately US$1.3 billion of which $1.1 billion was the base price. Announcing the deal, Bumi stated that Tata Power had entered into a "long term" coal off-take agreement with KPC "for the supply of approximately 10 million tonnes per annum at index linked prices for its power plant at Trombay in India as well as for future power projects, including the recently won Ultra Mega Power Project of 4,000MW at Mundra in India."[8]
  • In November 2012 Tata Power announced that it had bought a 26% stake in PT Baramulti Suksessarana Tbk ("BSSR") in Indonesia. In a media release Tata stated that "PT Antang Gunung Meratus ("AGM"), a 100% subsidiary of the BSSR, and BSSR together own approximately 1 billion tonnes of coal resources in South and East Kalimantan." The company stated that "we recognize fuel security is key to support Tata Power's growth agenda. ... This acquisition would aim to support our power generation projects in select geographies, to be developed over next few years." The company stated that as part of the purchase the company can "purchase about 10 million tonnes of coal per annum."[9]

Articles and Resources

Sources

  1. Linc Energy, "Linc Sella Galilee Coal Tenement for $3.0 billion", Media Release, August 3, 2010.
  2. "Lanco Infratech seals $760 mn Griffin buy", The Financial Express, March 4, 2011.
  3. Anna Bligh (Premier and Minister for Reconstruction) and Rachel Nolan (Minister for Finance and Arts), "Premium price for Abbot Point Coal Terminal boosts disaster recovery", Media Release, May 3, 2011.
  4. Utpal Bhaskar, "GVK to buy 2 coal mines in Australia: Acquisition of Hancock Prospecting mines key to company’s plans of increasing capacity to 10,000MW by 2013", Livemint.com, June 16, 2011.
  5. Essar Energy, "Power", Essar Energy website, archived from July 10, 2011.
  6. Essar Energy, "Power", Essar Energy website, accessed June 2013.
  7. Sarah Thompson and Anthony Macdonald, "Rio appoints UBS to manage Mozambique assets sale", Australian Financial Review, June 27, 2013. Subscription required).
  8. Bumi Resources, "Bumi Announces Sale of 30% stake in its coal companies to Tata Power", Media Release, March 30, 2007.
  9. Tata Power, "Tata Power acquires 26% stake in large mines at PT Baramulti Suksessarana Tbk ("BSSR"), Indonesia", Media Release, November 08, 2012.

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