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Mumbai:
Tata Power Company Ltd (TPC), the energy arm of the Tata
group, is in talks with the Indonesian coal major Adaro
to acquire an equity holding in the latter.
"We
have been sourcing coal for our power generation activities
from two coal companies in Indonesia, Adaro and SaMtan.
Recently, Adaro''s management approached us with a proposal
for equity participation in the company. The proposal
is under consideration," a TPC source said.
Adaro
is the largest coal producer in Indonesia. It had sold
23 million tonnes of coal in the domestic and export markets
in 2003. The source said high volatility in international
oil prices has forced TPC to try different types of fuels
and fuel mix at its Trombay thermal plant in order to
maintain optimum fuel costs.
The
Trombay plant is a major provider of electricity to the
Mumbai city. The plant, though is a multi-fuel fired one
with facilities for firing oil, gas and coal, is oil dominated,
making it costlier compared to coal- fired plants. TPC
is therefore making initiatives to bring down its dependence
on oil.
The
use of oil as fuel at the plant has been brought down
from 73 per cent in 2002 to 54 per cent in 2004, while
that of coal has been increased from 13 per cent to 32
per cent during the same period.
Enhancement
of coal-firing limit by the government has given an impetus
for upping the use of coal at Trombay, the source added.
"Currently, we are procuring coal from Indonesia.
The sulphur and ash content in the Indonesian coal is
very low (0.1 per cent sulphur and two per cent ash) compared
to that available from other parts of the world.
Since
TPC has plans to convert other generation units to multi-fuel
mix units, it makes sense for the company to acquire some
coal equity abroad," a source close to the development
said.
It
may be noted that while other players in the industry
have proposed a hike in power tariffs following fluctuations
in the prices of coal, TPC has managed to keep its tariffs
constant.
According
to TPC officials, the multi-fuel technology has helped
the company to realise savings of Rs 188 crores during
the fiscal year ended March 2004. "TPC is relatively
shielded against the vagaries of
fluctuating coal prices as it has long-term agreements
to source imported coal to mitigate the risk of price
volatility and fuel availability," an official said.
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