Nalco cancels coal supply deal for planned smelter
Monday, August 20 2012 - 02:21 AM WIB
Nalco recently communicated the decision to Middle East Coal (MEC), which was to supply five million tons of thermal coal a year to run a 1,250-MW plant.
?In the past 18 months, MEC failed to formalize the supply agreement,? B. L. Bagra, Nalco?s Chairman and Managing Director said as quoted by BusinessLine. Nalco?s board will now consider other options, including acquisition of a coal mine in Indonesia.
?Coal-fired power is the key to the proposed energy-intensive smelter project. There are various options, such as finding another supplier or direct acquisition of a coal asset there? a call on the issue is expected in the near future,? he said.
Nalco could not wrap up the deal with MEC ? a joint venture between Ras al Khaima Investment Authority and Trimex group of Dubai ? even after short-listing of expressions of interest and an elaborate due diligence exercise.
Bagra said MEC, which holds the concession for 1.5 billion tons of coal resources in East Kalimantan province, could not achieve financial closure for its mining project. On this hinged Nalco?s supply agreement with MEC. Nor could it complete its planned equity restructuring in the intervening period. (*)