Lanco not to bid for Indonesian mine

The Hyderabad-based Lanco group is pulling out of the race for the Indonesian coal mine company Bumi Resources.

A senior Lanco executive confirmed the development and said, "We are no longer considering buying the 30 per cent stake in Bumi as we found the floor price to be too high."

Bumi, Indonesia's biggest coal mine operator has put up 30 per cent in the company for sale with a reserve price of $1 billion.

Lanco Infratech, the infrastructure arm of the Hyderabad-based Lanco group had initially expressed interest in acquiring the stake.

Others in the race are Tata Power, Reliance Energy and Japan's Sumitomo.

The Lanco group is now considering taking up stakes in other coal mine operators in Indonesia as well as in coal mines in South Africa, Nigeria and Australia.

Bumi Resources has reserves of 52 million tonne of coal, enough to generate 1,000 mw power for 12-13 years. Lanco, which was awarded the coal pit-head UMPP at Sasan in Madhya Pradesh, is also planning to put in its expression of interest for the third UMPP at Krishnapatnam in Andhra Pradesh. The company has also been awarded the 1000 mw Teesta and Anpara 3 power projects in Uttar Pradesh.

Tata Power has announced plans for a series of imported coal-based power plants on west coast of India totalling to around 6000 mw, including the 4000 mw ultra mega power project (UMPP) at Mundra in Gujarat. Tata Power has also been looking at mines in South Africa and Australia.

Acquiring coal mines would help the companies in assuring fuel supplies.

Moreover, Indonesian coal has lower ash content and higher calorific value than Indian coal, resulting in higher power generation with less fuel.