INDIA BUSINESS WORLD - DECEMBER 1st - DECEMBER 15th
- 2007
TATA POWER COMPANY, MONNET ISPAT & JINDAL PHOTO IN JOINT VENTURE FOR ORISSA COAL MINE
The Tata Power Company (TPC), Monnet Ispat and Energy and Jindal Photo Film are forming a joint venture company to develop a 290-million tonne (mt) coal mine at Mandakini in Orissa. The companies, which are building power plants of 1,000 mw each in the state, will hold equal stake in the JV mining company and consume coal in equal proportion.
The development, according to industry observers, is another instance of corporate houses coming together to meet raw material needs at a time when the demand is fast outstripping the supply. At present, Tata Power is jointly developing a coal block with AV Birla flagship company Hindalco Industries in Jharkhand. Similarly, Hindalco and Essar Power, through their JV firm Mahan Coal Company, are developing coal mines at the Mahan block of Sidhi-Singrauli fields in Madhya Pradesh.
According to sources in the know, Tatas, Monnet and Jindal are setting up pit-head power plants in Orissa, having a cumulative capacity of 3,000 mw, with an aggregate investment of over Rs 12,000 crore. "The memorandum of understanding for the power projects had been signed mid-2006. However, it was awaiting coal linkage," said the sources. Confirming the allocation of the coal mine for the pit-head project in Orissa, a TPC official said, "Each company will have the right to consume almost 98 mt coal from the reserve in Mandakini. The power projects are expected to come up by 2012."
A major part of the power generated from the projects will be used for the captive purposes. Monnet Ispat has signed an MoU with the Orissa government to set up a 0.25mt steel plant with an investment of Rs 255 crore. For supporting the steel plant with power, the company will set up a 600 mw project in the first phase, which will be expanded to 1,000 mw in the second phase, said sources.
In September 2006, TPC had signed MoU with the Orissa government for setting up 1,000 mw coal-fired power project. The company is looking to add up another 1,000 mw in the second phase. Moreover, TPC is setting up captive power plants for Tata Steel's expansion projects in Chhattisgarh, Orissa and Jharkhand.
In the Tatas-Hindalco JV, the latter holds 70% stake. The mines allotted to Hindalco and Tatas are located in Palamau, near Latehar, where the Birla company is setting up its green-field project that includes a 350,000 tonne per annum aluminium smelter and a 750-mw power plant.
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