Indian utility SEL seeks coal supply, mine assets

OREANDA-NEWS. Indian private-sector power producer Simhapuri Energy (SEL) is looking to secure long-term coal supplies ahead of its new generation capacity coming on line later this year.

SEL is looking to secure the coal through long-term supply contracts, or by acquiring mining assets. Hyderabad-based SEL is currently developing 1,920MW of coal-fired generation capacity at Thamminapatnam, near Krishnapatnam port in Andhra Pradesh state, in three phases.

The project currnently has 600MW of operational capacity, which requires 3mn t/yr of coal. SEL is developing a further 1,220MW that will require a further 6mn t/yr of coal on completion.

Indian power producers have been forced to boost imports in recent years to meet rising demand, while domestic coal producers regularly miss their output targets. Dominant producer state-controlled Coal India fell short of its 507mn t output target for the 2014-15 fiscal year that ended on 31 March, producing 494.23mn t.

More Indian companies are also showing an interest in acquiring overseas coal mining assets. State-controlled Singareni Collieries last week said it is looking to acquire thermal coal mines in Australia, Indonesia, South Africa and Mozambique to help secure long-term supplies for its customers.

Imports are rising even as Delhi is pushing ahead with ambitious plans to boost domestic production to end the country's reliance on imported coal. India could halt thermal coal imports within three years, India's coal minister Piyush Goyal said in November. He called on CIL to raise output to around 1bn t/yr by 2019 from 494mn t/yr in 2014-15. But this appears to be optimistic given the company's track record of missing previous production targets.

India's Central Electricity Authority last week set a target for the country's power utilities to import 73mn t of thermal coal for the 2015-16 fiscal year to help overcome the persistent domestic shortage.