Essar buys E. Kalimantan coal mines

Indian conglomerate The Essar Group announced Thursday that it has signed a definitive agreement to purchase Aries coal mines in Indonesia for US$200 million.

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, it said.

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. 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 mine is expected to start within a year. (alex)