The Essar Group announced today that that it has signed a definitive agreement to purchase Aries coal mines in Indonesia. The deal gives Essar Power access to an estimated resource base of 100 million tonnes of thermal coal and mineable reserves of 64 million tonnes. The transaction is subject to regulatory approvals and is expected to be closed by April 2010.
Essar Power, which is India’s second largest private power producer, is currently building six power projects in India, ramping up its power generation capacity from 1,220 MW to 6,100 MW by 2012. The transaction is part of Essar Power’s strategy to continue to achieve backward integration and to secure raw material needs for its operations.
The Aries coal mines are located in the Kutai region of East Kalimantan in Indonesia. The high-quality bituminous coal has Gross Calorific Value (GCV) of 6,000 with low ash and low moisture and is suitable for power plants. Production from the Indonesian mine is expected to start within a year.
Commenting on the deal, Anshuman Ruia, Director, Essar Group, said: “We are a vertically integrated power producer, with ownership and access to the raw materials needed to run the business. The Indonesia mines are an excellent addition to our growing portfolio of coal assets. This acquisition adds another 100 million tonnes to our existing thermal coal resource base of about 275 million tonnes in India.”
Talking about the company’s long-term objective, he added: “This is a major step forward in Essar’s strategy of securing long-term fuel linkages and capturing the complete value chain in all its businesses.”
About Essar Power
Essar Power is India’s first independent power producer and is today the country’s second largest power generation company in the private sector. It operates four power plants with a combined capacity of 1,220 MW in three locations. These include two gas-based plants n Hazira, a co-generation plant in Vadinar and a coke oven gas-based plant in Algoma in Canada. This capacity is being expanded to 6,100 MW by 2012 through six under construction projects.
One of the lowest cost power producers, Essar Power has an immaculate track record of safety, and has won several safety awards. It has a growing portfolio of gas, coal and liquid fuel-based power plants, and is exploring new opportunities in conventional and renewable power generation globally. It is also expanding in the transmission and distribution sectors, after having become the first private power company in India to get a transmission license.
About Essar Group
The Essar Group is a multinational conglomerate and a leading player in the sectors of Steel, Energy, Power, Communications, Shipping Ports & Logistics, Construction, and Minerals. With operations in more than 20 countries across five continents, the Group employs 60,000 people and has revenues of USD $15 billion. For more information, visit www.essar.com
