Reliance Power acquires three Indonesian coal mines in novel payment deal

02 May 2008

Mumbai: Anil Ambani Group firm Reliance Power Ltd  has acquired a 100-per cent stake in three Indonesian coal mines, with total reserves of two billion metric tonnes, for whivh it will pay on the volume of production the mines yield.

Instead it expects to invest around $1 billion over the next eight o 10 years on developinmg the mines and setting up logistics facilities.

The acquisition was made by Reliance Coal Resources Private Ltd, a wholly owned subsidiary of Reliance Power Limited, the company said in a regulatory filing.

The three companies - Srivijaya Bintangtiga Energy, Bryayan Bintangtiga Energy and Sugico Pendragon Energy – are located in the South Sumatra area of Indonesia spread over an area of 40,000 hectares.

Reliance Power can mine up to 40 million tonnes per annum of coal from these three mines and plans to supply coal from these mines to its 4,000-MW ultra mega power project at Krishnapatnam in Andhra Pradesh and also to the Shahapur power project in Maharashtra.

Although the company did not disclose financial terms of the transaction, the payment dfor the acquisition is linked to the actual production of coal. JP Chalsani, CEO, Reliance Power .