Joint ventures for NTPC foray into coal mining

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Calcutta, Nov. 6: The National Thermal Power Corporation (NTPC) has decided to float multiple joint venture firms to kick off its plan to diversify into captive mining.The central public sector power generator will hold a 26 per cent stake in each of these ventures. The corporation has given a mandate to ICICI-Winfra to locate joint venture partners for its captive mining foray. Initially, NTPC expects to float at least four to five joint ventures.NTPC has acquired large coal blocks like Pakri Bardwadhi in Jharkhand with an annual capacity of 12 million tonnes. It is also scouting for another set of coal blocks with an annual capacity of 40 million tonnes within the respective command areas of Mahanadi Coal Fields and South Eastern Coal Fields in the Talcher and IB Valley region.NTPC will buy back the coal at a pre-determined price from the joint venture partner.NTPC has also asked ICICI-Winfra to locate a contract mining partner, who will be involved in developing these captive mines once the joint ventures are finalised.ICICI-Winfra MD D. Sengupta said, "NTPC will invite global bids from prospective joint venture partners. We have been given the mandate to work out the bid document and conduct the tendering exercise. We will invite international competitive bids. We are hopeful to zero in on NTPC's prospective partners by January. While NTPC will hold a 26 per cent stake in these ventures, 74 per cent will be held by private parties."Explaining the terms of agreement with NTPC, Sengupta said ICICI-Winfra will select the joint venture partner for captive mining.Foreign mining companies are expected to participate in the bid. However, they are a bit shaky about quoting prices, said mining industry sources. "We feel that each mining joint venture will have to spend Rs 1,200 crore to develop these mines. However, actual investment depends on the reserves available in the coal blocks, which will be acquired by NTPC," Sengupta said. 

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