PTC India Plans Joint Ventures for Coal Mining Assets

PTC India Plans Joint Ventures for Coal Mining Assets

Thursday, April 22, 2010

PTC India Ltd., the country's largest power trader, plans to form joint ventures to purchase shares of mining projects overseas to help secure fuel supplies for Indian power producers are facing shortage of coal, its chairman said Monday.

New-Delhi based PTC plans to buy coal assets overseas and Indian companies in Indonesia and Australia and may sell the imported coal in India is the spot market or through long term contracts with independent power producers, Tantra Narayan Thakur told Dow Jones Newswires in an interview.

"We would prefer a joint venture for large projects like we do not have such funds, and second, logistics, will be difficult for us to manage large projects alone," Mr. Thakur said.

India, which imports 59 million tons of coal in the fiscal year ending March 2009 is expected to import as many as 150 million tonnes in March 2017 as a local output has not been able to keep pace with the addition of a country's capacity for generating electricity.

India is already facing peak power shortages and the request is considered to lag supply for years to come as the world's second fastest growing economy continues to grow more than 7% per year.

Local power producers and coal miners have been scouting for assets in Indonesia, Australia, Mozambique and the United States is committed to ensuring supply and to guard against price fluctuations.

PTC, which raised 17 billion rupees ($ 368 million) over two calendar years, until the end of 2009 by issuing 144.09 million shares to institutional investors, has set aside 3 billion rupees for coal assets.

"In addition to 3 billion rupees, we will look forward to joint venture partners to provide (the capital) and the company may also seek funding from the private sector," said Mr. Thakur said.

PTC is in the process of preparing a UK fund Ashmore Group to acquire assets related to energy. Some of these results can also be used to buy coal assets, Mr. Thakur said.

PTC and Ashmore was in the final stages of discussions for the funds and can be signed a joint venture by March 31.

"We have not decided on the size of funds," he said, adding that a joint venture agreement has been signed, the company will come to the amount of after market testing.

TCM can also get funding from private equity investors to buy coal mines, Mr. Thakur said.

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