Sugico in talks to sell coal mine to India?s NTPC

Sugico Group has offered its coal mine in East Kalimantan to Indian state-run power utility NTPC Ltd for partnership which involves stake sales and a long-term coal supply, livemint.com reported.

R.S. Sharma, chairman and managing director of NTPC, confirmed the talks. ?We are waiting for the technical report,? he was quoted by the news portal as saying.

The utility company has already appointed Macquarie Group Ltd as the investment banker for the deal which is estimated to reach US$1 billion. The mine has coal reserves of about 8 billion tons.

NTPC?s total coal requirement is around 160 million tons, of which about 10 percent is imported to cover the domestic shortfall. Fresh coal supplies are critical as the fuel powers at least 80 percent of its installed capacity of 31,134 megawatt.

While NTPC projects are facing an acute coal shortage, the utility has not succeeded in plans to source either coal or gas from overseas. It recently dropped plans to acquire a South African coal-mining firm due to the high sulphur content of the reserves. (*)