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Tata Power to offset losses due to higher coal prices

Published by , Editorial Assistant
World Coal,

According to the Economic Times, ET Intelligence Group, Tata Power, which holds a stake in Indonesian mines, is to benefit from rising global coal prices, which have risen by 58% during the last six months. The benefit will be reflected in its performance over the coming quarters as the contracts are medium to long term. The majority of annual contracts are negotiated in the December quarter and therefore do not reflect entirely in the figures for the September quarter.

Considering Tata Power’s 30% stake in the mines, over 25 million t of sales is attributed to the company out of an estimated total 83 million t sales from the mines for FY17. This should more than compensate for the loss in its Mundra plant due to tax imposed by the Indonesian government on exported coal.

In order to ameliorate the situation, Tata Power requested a tariff relief which was granted by Central Electricity Regulatory Commission in December. However, the final resolution rests on the judgment of the Supreme Court. The Mundra plant consumes over 10 million t of coal annually. Following Tata Power’s adjustment for this, the company is positioned to benefit from higher coal prices on the remaining 15 million t of coal from Indonesian mines, which is sold to other consumers.

For the full story please visit the Economic times

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Indonesia coal news