3 Min Read
* Looking at U.S., Colombia and Africa for coal assets - exec
* Move to secure energy needs and sustainability of contracts
* No plan to acquire more mines in Indonesia
NEW DELHI, Oct 4 (Reuters) - India's Tata Power is looking for more overseas coal assets, a top executive said, joining the growing number of companies in the energy-hungry nation looking to secure supplies abroad amid a widening domestic shortfall.
"We are continuously looking at the other geographies and today, the options are the U.S., Colombia and Africa," Managing Director Anil Sardana said, pointing to logistics, cost and sustainability of contracts.
"There are countries where you can't be sure that you sign a contract today and tomorrow it is reneged or altered," Sardana added.
India's coal ministry places domestic demand at around 772 million tonnes against an expected supply of about 580 million in the financial year to March 2013.
Coal accounts for two-thirds of power production in India, which is struggling to meet the demands of a fast-growing economy and increasingly affluent population of around 1.2 billion people.
The power sector is facing a "big challenge" in sourcing fuel, hindering new capacity, Sardana told reporters on the sidelines of an industry event on Thursday.
"What is the country going to do in the years to come if there is no clarity as to how we will add capacities?"
Traders expect Indian imports of coking coal, used mainly in steelmaking, and thermal coal to be about 100 million tonnes in 2012/13.
A change in Indonesia's mineral export rules has pushed up the cost of coal for Indian buyers, who source 70 percent of their coal imports from the southeast Asian nation, making about 9,000 megawatts of imported coal-based projects in the country economically unviable, including Tata's 4,000 MW Gujarat plant.
Tata Power, which has stakes in four Indonesian mines, do not plan to acquire more mines in that country, Sardana said.
"We already have four mines. We don't want to put all eggs there, and therefore, the other geographies are very actively being pursued," Sardana said.
Among other Indian companies that have secured overseas coal assets are GVK Power and Infrastructure and rival Adani Enterprises. Both are developing multi-billion dollar coal and rail projects in the untapped Galilee Basin in Queensland, Australia.
Tata Power's total generation capacity stands at 6,099 MW, the company said in June. It plans to import 10 million tonnes of coal in this fiscal year and has bought 7 million tonnes so far, Sardana said. Tata Power expects its coal imports to touch 50 million tonnes by 2020.
"We as a utility need coal on a sustainable basis," Sardana said.