India’s Tata Power Seeks Overseas Coal Mines to Boost Supply

Tata Power Ltd., India’s biggest electricity generator outside state control, may invest in two coal mines overseas to supply as much as 4 million metric tons of the fuel as record prices curb expansion.

Mines in Australia, Indonesia or Mozambique would meet half the additional 8 million tons of coal that Tata Power needs by 2013 to fuel a fivefold increase in generating capacity, executive director S. Ramakrishnan said in his Mumbai office.
Tata Power invested $1.2 billion in two Indonesian mines last year, joining JSW Energy Ltd. and Adani Enterprises Ltd. in securing overseas supplies as coal prices soared. India and China, the world’s two fastest-growing major economies, need fuel to meet a doubling in energy consumption by 2030, according to the International Energy Agency.

“With coal prices flaring up no trader, even we as owners of two coal mines, wants to make long-term commitments,” said Ramakrishnan. “If such a situation prevails, we may be forced to take equity positions to secure supplies.”

Coal prices will likely stay near record levels for the next three years, Ramakrishnan said. The imported coal will help Tata Power increase capacity more than fivefold to 12,861 megawatts by March 2013, he said.

Bloomberg