Of the four Indonesian mines, Tata Power already owns 30% stake each in two of them, with an offtake of a little over 40 MT annually from them

Mumbai: With a severe shortage of domestic coal supply as the state-run monopoly Coal India is unable to increase output, private utility Tata Power is scouting for coal mines overseas, particularly in Indonesia and South Africa, reports PTI quoting a senior company official.

“Given the demand for the fuel for our power plants and shortage of domestically produced coal, we have to depend on imports. We are looking at Indonesia and South Africa for acquiring coal mines,” Tata Power executive director (operations) S Padmanabhan told PTI in an interview.

However, he did not elaborate on the timeline for any such deal or the quantum of funds earmarked for this. But he said this would not be an outright purchase but mostly picking up stakes in already operating mines.

Currently, the company sources coal from four mines in Indonesia and two in Australia.

Of the four Indonesian mines, Tata Power already owns 30% stake each in two of them, with an offtake of a little over 40 million tonnes (MT) annually from them.

“However, our current offtake from these mines is only 3 MT, while we can ship as much as 20 MT from each of them. But we don't do that since that will push up cost of power too high.”
 
The imported coal is used to fuel the company's plants in Trombay (1,580MW) in Mumbai and the 4,000MW ultra mega power project (UMPP) in Mundra, Gujarat.

This March, the first unit of 800-MW of the Mundra UMPP was commissioned and Tata Power expects to commission the second unit of an equal capacity by August.

As of 12 March 2012, the company had an installed capacity of 5,299MW, which includes 447MW hydel power, 28MW of solar and 375 MW of wind mills and the rest comes from mix of coal, oil and gas fired plants.

Tata Power's shares were trading at Rs99.40 per share on the Bombay Stock Exchange at 11:00am, while the Sensex was at 17,012.