Reliance, Tata Power may vie for Indonesian coal mine

Bumi Resources is Indonesia's largest coal producer and exporter with reserves of 52- million tonnes, enough to generate 1,000 MW power for over 10 years. The Indonesian company has put a reserve price of $1 billion for a 30 per cent stake.

Both Indian power producers have expressed interest in taking equity stake in the Indonesian firm.

REL currently has a 500 MW coal-based power plant at Dahanu in Maharashtra and is also setting up thermal projects in Uttar Pradesh and is planning a project in Orissa. It was also the second lowest bidder for both the Sasan and Mundra ultra mega power projects.

Tata Power, which won the 4,000 MW Mundra project, is exploring the possibility of buying coalmines in Indonesia and elsewhere. It would need to import around 12 million tonnes of coal annually starting 2012 for the project. It also plant to build a 2,000 MW coal-based power plant along the coast of Maharashtra.

Acquiring coalmines would help the companies in assuring fuel supplies. Moreover, Indonesian coal has lower ash content and higher calorific value than Indian coal, resulting in higher power generation with less fuel.