Adani eyeing more Indonesian coal blocks

Indian firm Adani Group is in an advanced stage of negotiation to acquire more coal mines in Indonesia, an Indian media reported Monday.

The company currently has a low-sulphur and low-ash coal block with 140 million tonnes of geological reserves in East Kalimantan, which was recently brought into production.

?We are looking for acquisition of more coal reserves in Indonesia and are in an advanced stage of negotiations with a few parties,? the Group Chairman, Gautam Adani, told Business Line in an interview.

?We prefer Indonesia as a destination due to its proximity to the Indian shores resulting into lower freight cost and voyage time,? he said.

According to Adani, the Group is aiming to have a captive coal reserves ? having an annual production capacity of over 40 million tonnes in the next five to six years.

The existing captive reserves in the island of Bunyu in E. Kalimantan were brought into production about four months back.

The mine is currently producing at a capacity of 1 mtpa, which is sold to other power producers in India.

The capacity is slated to be enhanced to 2 mtpa by December 2008, when the first unit (330 MW) at Mundra is slated to start production.

?The production from the Indonesian mine is slated to reach at 8 mtpa before the entire 4,620 MW capacity at Mundra is commissioned in 2011,? Adani said. The mine is operated in collaboration with local partner PT Lamindo Inter Multikon.

Adani have already ordered two cape-size vessels to ferry coal from Indonesia. The vessels will be delivered in 2009-end.(*)