India's power companies like Adani, Reliance Power, Tatas and Essar will remain aggressive on buying coal reserves overseas in the next 3-5 years, even as Chinese entities will continue to pose a "threat" to such deals, energy information provider Platts said today.
"Indian private companies like Adani Enterprises, RPower, Tata, Essar will continue to rise from strength to strength in securing coal reserves overseas.
"However, biggest threat to such acquisitions will continue to be from China as firms there would also intensify overseas buyouts in next three to five years," Platts International Coal Managing Editor James O'Connell told reporters here.
India and China are the fastest growing economies of the world and are dependent mainly on coal to produce power. China the world's largest producer of coal is aggressively securing such resources overseas to meet its rising demand.
"In last few years, Indian firms especially the private ones have intensified their hunt to buy out coal mines abroad. The realisation came late, but they have a vision," O'Connell said.
In one of the largest coal mine deals by an Indian group, the country's largest coal importer Adani Enterprises had in August bought the Australia-based Linc Energy's Galilee coal tenement in the Queensland for about Rs 12,600 crore.
It had also been awarded preferred proponent status for developing the Dudgeon point terminal in Macay, Queensland, which gives the Adani Group the right to develop a coal terminal with an annual capacity of 30-60 million tonnes.
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Adani Enterprises also entered into a USD 1.65 billion deal with the Indonesian government and its mining company PT Bukit Asam for setting up rail and port infrastructure in the island nation and get rights to source coal to India.
Besides, Anil Ambani Group firm Reliance Power has bought three coal mines in Indonesia. Another group, Essar had earlier this year bought Trinity Coal Corp in the US and is aggressive for a similar acquisition in Australia.
"Due to the stiff competition between Indian and Chinese firms the valuation of such mines will continue to rise. Consumers must be prepared for costly coal," O'Connell said.
Earlier this year, Jindal Steel & Power vied with China's Meijin Energy Group to buy Rocklands Richfield. China Shenhua Energy also outbid other rivals when it bought license for finding coal in an Australian basin for ASD 600 million, Platts International Coal Report Associate Editor Mike Cooper said, adding analysts termed the purchase as costly.
There is a rising trend in global coal prices and also with India planning to price its coal on par with global rates in coming years, power prices could also go up.
India's coal imports are expected to touch 164 million tonnes by 2015 as against the current 73 million tonnes, Platts said.