New Delhi : Reliance Power, controlled by billionaire Anil Ambani, bought two companies that own three coal mines in Indonesia as it seeks fuel for power plants it is building in India, Asia's third-biggest energy consumer.
Reliance Coal Resources, a unit of Reliance Power, has agreed to acquire all the shares of the two companies, the Indian electricity generator said in a statement to the Bombay Stock Exchange yesterday, without naming the companies or a value of the deal. Reliance Power said in May 2008 it agreed to buy three coal mines in Indonesia. The company didn't say if yesterday's announcement involves the same mines. Ravi Sodhi, a spokesman for the Anil Dhirubhai Ambani Group, couldn't immediately be reached for comment.
Reliance joins the Essar Group and Tata Power Co. in securing coal assets in Indonesia to supply surging power consumption in the world's second-fastest growing major economy. More than half of India's electricity generation is coal-fired, according to the power ministry's website.
"Indonesian coal is of higher calorific value than Indian coal and that offsets the higher cost of transporting it here," said Deven Choksey, chief executive officer at K.R. Choksey Shares and Securities in Mumbai, who manages about $123 million (Dh451 million) for wealthy individuals. "Besides, buying coal mines in India is fraught with delays because of environmental issues."
The coal from the Indonesian mines will be used at a planned 4,000 megawatt power plant at Krishnapatnam and other projects, according to the statement.
Reliance Power rose 1.6 per cent to Rs154.7 at 11.22am in Mumbai trading compared with a 0.5 per cent gain in the benchmark Sensitive Index.
