Tata Power will acquire 30% stake in two major Indonesian thermal coal producers owned by PT Bumi Resources Tbk (Bumi) for Rs 4,840 crore ($1.1 billion) giving it access to one of the largest thermal coal mines in the world.
An official statement issued today said the company has signed definitive agreements to purchase 30% equity in PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin) and a related trading company owned by PT Bumi Resources Tbk (Bumi).
"The move not only secures our fuel requirements in light of aggressive growth plans charted out by the company but also opens up opportunities for Tata Power to own and operate a range of world-class, competitive and profitable electricity and energy businesses in India and overseas," Prasad Menon, managing director, Tata Power said.
The acquisition would be made through an offshore special purpose vehicle (SPV) to be formed, the statement added.
As part of the purchase, Tata Power has signed an offtake agreement with KPC, which entitles it to purchase about 10 million tonne of coal per annum. The purchase supports Tata Power's upcoming projects on India's west coast enabling it to generate 7,000 MW over the next five years.