NTPC in talks to pick 50 per cent stake in Australia's MetroCoal project

Facing uncertainty over the supply of coal in the country, public sector power producer NTPC has initiated talks with Australian coal mining major MetroCoal to acquire a 50 per cent stake in one of its mega projects.

Sources, on the condition of anonymity, told NDTV Profit that MetroCoal has offered a 50 per cent stake in Bundi project in Surat Basin in Queensland province of Australia.

NDTV Profit's mails sent to MetroCoal and NTPC remained unanswered.

However, NDTV Profit has learnt that MetroCoal has given the mandate of finding a partner for its Bundi coal project to Australia-based consultant PANTAQ Corporation. Also, sources in power ministry confirmed that PANTAQ has approached Central Electricity Authority (CEA), seeking a suitable public sector firm for the joint venture with MetroCoal.

MetroCoal has put in a criteria of "actual user of coal" for forming the joint venture (JV), basically meaning that the partner should be the end-user of the coal to be exported from the Australian coal project.

NDTV Profit also learnt that CEA has told NTPC that "PENTAQ proposes to invite NTPC for a detailed discussion and due diligence to invest in one of the largest coal mine asset of Australia owned by MetroCoal, named the Bundi Project, located in Surat Coal Basin, in Queensland."

Another official, on the condition of anonymity, told NDTV Profit that CEA has advised NTPC to "keep in view (a) inadequate availability of coal from the domestic sources, (b) generation loss being reported by NTPC in their power station due to shortage of coal, (c) vital need for energy security, the proposal merits consideration and due diligence by NTPC".

MetroCoal's website says that Bundi coal project of MetroCoal have over 1,500 million tonne of reserves. The Bundi coal project will start production from 2015. MetroCoal has four more big coal projects in Australia.

NTPC's annual coal requirement is a little over 160 million tonne for its 33,000 MW coal-based power production capacity. NTPC would require more coal in coming years as it plans to add about 3,000-4,000 MW capacity every year. Given the uncertainty in domestic coal supply, the Australian JV may help NTPC a big deal.