NEW DELHI: Larsen and Toubro (L&T ), the country’s largest engineering and construction company, is in talks to buy a thermal coal mine in Australia for about $300 million, at least two people familiar with the development said. Thermal coal is used for generating power.
L&T has shown interest in the mine at Queensland in northeastern Australia, said Amar Bhasin, vice-president of Hindustan Global Resources (HGR), an Australian exploration, mining and consulting company that is facilitating the negotiations.
The mine has an estimated coal reserves of 250 million tonne (MT) that can generate enough electricity to meet the country’s needs for about seven months.
“The mine we have offered to L&T on behalf of the Australian firm lies close to the port of Brisbane, which makes it more attractive,” said Mr Bhasin. He refused to reveal the identity of the Australian company . Australia is known for its highquality coal assets. The deal will cost the Indian company $250-300 million , said another person in direct knowledge of the company’s plan.
“The acquisition will help in case the company plans to bid for any ultra mega power project (UMPP) going forward,” said the person requesting anonymity. L&T is also in talks with some mining firms in Indonesia for possible acquisition, the person added.
When contacted, the L&T spokesperson declined to comment on the development. L&T , one of the big suppliers of power generation equipment
in the country, plans to make a major entry into the power generation space.
Aussie co yet to get mining licence
IT roped in Ravi Uppal, former head of global markets division of the ABB Group, as the managing director of L&T Power in December last.
HGR, which is owned by a group of non-resident Indians, has also proposed to assist L&T in the project. “We have given a proposal to L&T , under which we are ready to undertake coal exploration and mining work for the firm, post acquisition ,“ Mr Bhasin said.
He, however, said the Australian firm is yet to get a mining licence for the coal block from the government.
In the past few years, Indian power companies have been scouting for coal mines overseas due to unavailability of good quality coal in India.
Early this year, GMR Infrastructure acquired Indonesian coal company PT Barasentosa Lestari to ensure coal supply for its proposed 1,500 MW power plant in the western coast. Last month, Jindal Steel and Power bought a thermal coal mine in South Africa.
7 Sep 2009, 0447 hrs IST,
source:ET
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