Home / Companies / People /  Nalco shortlists coal supply firms for Indonesia power project

New Delhi: State-owned Nalco on Thursday said it has shortlisted two firms for supply of coal for its Rs18,000 crore aluminium-cum-power project in Indonesia, work on which is likely to begin by June.

The company has already selected the UAE-based RAK Minerals as JV partner to set 0.5 million tonne (MT) aluminium smelter and 1,250 MW captive thermal power plant in East Kalimantan, Indonesia, part of its ongoing Rs58,000 crore capacity expansion plan.

“Five firms has shown interest to supply coal to our proposed aluminium-cum-power project in East Kalimantan, Indonesia. We have shortlisted Muara Enim and Bumi Muara Prasada and asked for commercial bids," Nalco director finance BL Bagra told PTI.

Detailed commercial proposals would be submitted by both the firms by February next year, based on which Nalco enters into a pact with one of the firms for supply of about 10 million tonne per annum (MTPA) of thermal grade coal, half of which would be utilized for the project, he said.

The five firms, which have responded to the expression of interest (EoI) bid floated by Nalco included MEC Middle East, Pram Dwi Jaya Muara Enim and Bumi Muara Prasada.

While the firm intends to import about one million tonne of alumina annually from its facilities in India to feed the aluminium smelter, the coal for the captive power plant will be procured locally.

Nalco needs 8-10 MTPA of thermal grade coal, 4-5 MTPA of which is for its East Kalimantan project and rest for its energy requirement elsewhere.

The company had invited EoI bid from competent miners or concession holders having resources of more than 500 MT in East Kalimantan province in Indonesia in close proximity to seaport, fresh water source and other infrastructure facilities, for coal supply.

The company has already selected Ras-al Khaimah Minerals as one of the joint venture partners for the aluminium-cum -power project, while others would be finalized soon.

JV agreements are likely to be finalized in six months and the company hopes to start work on the projects by June 2011.

Apart from Ras-al Khaimah Minerals an Indonesian state -owned mining firm too has evinced interest in the project, which will have debt equity ratio of 70:30.

Nalco’s investment would be 15% of the total project cost, while the JV partners would fund 15% and the remaining 70% would come through loans.

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