Indian integrated power company Tata Power has acquired a 26% stake in the Baramulti Suksessarana (BSSR) coal mine in Indonesia for an undisclosed amount to ensure fuel security for its growth prospects.
Tata Power's subsidiary Khopoli Investments is now a shareholder in BSSR as a result of the transaction.
BSSR, along with its wholly owned subsidiary Antang Gunung Meratus, owns nearly one billion tonnes of coal resources located in south and east Kalimantan in Indonesia.
The acquisition follows the recent report of a net loss in Tata Power's second quarter results ending 30 September 2012 with increased production costs at its coal units contributing to the results.
The company recorded a consolidated net loss of INR838m this year, compared INR11.9bn for the corresponding quarter in 2011.
Tata Power managing director Anil Sardana spoke about the deal saying that fuel security is vital to support the company's focus on growth. "Thus, besides entering into coal off-take agreement, we have acquired a 26% stake in this coal mine too, as its reserves and outlook is very promising.
"This acquisition would aim to support our power generation projects in select geographies, to be developed over next few years," Sardana added.
Tata Power has a long term coal supply agreement with Antang Gunung Meratus and also owns 30% equity stake in Kaltim Prima Coal (KPC) and Arutmin Indonesia (AI).
Image: Tata Power has expanded its presence in Indonesian coal. Photo: Kaltim Prima.