India’s Neyveli Lignite Corporation Limited (NLC) is seeking to acquire coal assets in Indonesia and South Africa through joint ventures (JVs) with local companies.
The acquisitions would be used to source feedstock for the company’s expansion and greenfield thermal power projects in India. The coal blocks to be acquired in Indonesia and South Africa through JVs would be linked as raw material sources for NLC’s ongoing thermal power projects, like the thermal power station II expansion of two 250 MW units and the Tuticorin thermal power project, comprising two 500 MW units located in the southern Indian town of Tuticorin.
NLC had taken a strategic decision to reduce lignite mining operations because of problems of land acquisition and mining of hard rock surfaces in the country and instead leverage its mining capabilities to develop mines overseas and expand thermal power generating capacities within India, linked to its overseas assets, company officials said. NLC might even consider two separate JV partners for Indonesia and South Africa.
However, a final decision will be taken only after geological confirmation of the coal reserves and commercial proposals to be submitted by proposed JV partners, the officials said. NLC would be willing to transport the coal extracted from overseas blocks in Indonesia and South Africa in its entirety to domestic thermal power plants or share the extracted coal with its proposed JV partner, depending on the agreement that may be concluded between the companies and the mineable reserves of the blocks acquired.
Meanwhile, NLC has proposed setting up a 1 000 MW coal-based power plant in Ib Valley in the eastern India state of Orissa in collaboration with Mahanadi Coalfields (MCL), a wholly owned subsidiary of Coal India, the world’s largest coal miner. The project would entail an investment of $1-billion. NLC and MCL have a separate JV to develop a coal reserve in Talabira, Orissa that will produce 20-million tons of coal a year, part of which would be linked to feed the Ib Valley power project.
NLC, which operates predominantly in southern India, has three lignite reserves that produces 10.5-million tons, three-million tons and 10.5-million tons of lignite respectively. The company also operates three lignite-based power plants in southern India with generating capacities of 600 MW, 1 470 MW and 420 MW respectively.
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