CESC may buy mines abroad

The RPG group power utility CESC is contemplating to acquire low ash high quality overseas coal mines for its proposed giant power projects at Haldia in West Bengal, and yet to be fixed locations in Jharkhand and Orissa.

Sources in the group said it was exploring the opportunities in Indonesia for acquiring coal blocks as well.

The RPG group flagship might induct a foreign strategic partner for the overseas venture. The group's foray into overseas mines was likely to be spearheaded by the group mining outfit, Integrated Coal Mines Ltd (ICML).

Besides overseas coal blocks, ICML of the RPG group has submitted bids for three coal blocks at the second round of bidding that concluded on January 12. The Union coal ministry has offered 81 blocks with a combined reserve of 81 billion tonne in this round.

The RPG group also submitted bids in the first round through ICML but was yet to get any blocks.

ICML, an associate company of CESC, was at present the owner of a coal block at Sharsatali near Asansol in West Bengal. The company supplied coal solely to CESC as a coal linkage.

When contacted, the vice-chairman of CESC, Sanjiv Goenka, said that the group was exploring the possibility of acquiring overseas mines. but nothing had been formalised yet.

"It is on our radar," he said. Goenka also admitted that the group has submitted bids for three coal mines in the second round of bidding, but refuse to give details.

"CESC proposes to invest over Rs 16,000 crore in power over a period of seven years for generating additional 4,200 mw capacity, so its needs to tie up big coal blocks immediately," he said.

According to the sources, ICML had submitted bids for three blocks in Jharkhand and West Bengal.

ICML currently enjoyed rights to an estimated coal reserve of 80 million ton at Sharsatali. The mine had an annual production of around 2.2 million ton.

The mine was good enough for the existing generating capacity of CESC but not for the new projects.

"At best, Sharsatali can feed the 250 megawatt third unit of the Budge Budge power plant, which will start generation in another one year," said sources.

CESC currently had a generating capacity of 1,000 megawatt.

Goenka had told at the company's last annual general meeting that the power utility was keen to increase its distribution area beyond Kolkata as well.