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JSPL to begin coal production from 2 overseas mines by mth-end

Last Updated: Sunday, August 12, 2012 - 15:13

New Delhi: Jindal Steel and Power (JSPL) plans to begin production from two of its overseas coal mines in Indonesia and Mozambique by month-end, a development which will ensure supply of inputs for the existing and upcoming projects, a senior company official has said.

Both the mines are strategically important for Naveen Jindal-led firm, which is aiming at 20 million tonne steel making capacity by 2020 and power generation capacity of over 21,000 MW (together with its subsidiary Jindal Power).

"By August-end, the production will begin in Indonesia. We have obtained most of the (regulatory) clearances. We will also begin production from Mozambique by month-end," company's Vice Chairman and Head, Global Ventures, Vikrant Gujral told PTI.

In Indonesia, the steelmaker has a thermal coal mine with reserves of over 250 million tonne (MT). Besides, it has 1.2 billion tonne of coking and thermal coal reserves Mozambique, for which the company had obtained mining licence in February 2009.

Gujral, however, added that the company is planning production in smaller quantities in the first year from both the coal mines overseas so that it gets stabilised and other related infrastructure can be put in place.

"First thing is to take the coal out, check the quality and moisture content and set up the logistics facilities. At this moment, we are not talking about quantity, we want production to stabilise first," he said, while declining to comment on the targeted production this year.

According to Gujral, the quality of coal at the Indonesian mine is very good as it has a gross calorific value between 4200 to 5300 Kcal/kg, while ash content is between 4 and 14 percent.

"This can be used in thermal power plants but we want production to stabilise first before taking any decision on shipping it to India (for company's power plants)," he said.

Besides, JSPL also has plans to set up a coal washery at Mozambique by the fiscal-end, to reduce the high ash content at the mine there, Gujral added.

While Mozambique mine contains both coking and thermal coal, Indonesian mine can produce thermal coal only. Coking coal is the essential raw material for making steel and thermal coal is used for power generation.

The company has a steel making capacity of 3 MT per year and power generation capacity of nearly 2,500 MW.

As part of its aim to ensure fuel security, the company has entered into a deal last month to acquire Canada's CIC Energy - which has 2.6 billion tonne of high quality thermal coal mines in Botswana - for over Rs 600 crore.

Besides, in May, it had entered into a coking coal supply agreement with Gujarat NRE Coal's Australian arm for 10 years for ensuring raw material security of its steel plants.


First Published: Sunday, August 12, 2012 - 15:13
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