CESC to pay $10 mn for 4.8% in Australian co

RPG Group company CESC Ltd has inked a deal to pick up a 4.8% stake in Australia- listed mining company Resource Generation for $10 million.

CESC acquired the 4.8% stake in Resource Generation through a Singapore-based wholly-owned subsidiary, Bantal Singapore Pte Limited. Last year, CESC had said that RPG group company Integrated Coal Mining would buy a 10% stake in Resource Generation for $10.5 million.

Following this issue, the RPG Group will have an interest of 11.6% in Resource Generation.

Following the deal, the terms of Integrated Coal Mining's agreement with Resource Generation for supply of coal from the Boikarabelo mine in South Africa have been improved.

Resource Generation in a communication said RPG group company Integrated Coal will now buy 139 million tonnes of coal from Boikarabelo mine of the company, compared to 37 million tonnes agreed earlier, and the purchase will now be over 38 years instead of 20 years.

CESC Ltd plans to use the additional coal in a 1,320-MW (660x2) power plant it intends to set up to feed power to the South African grid.

CESC will begin a feasibility study for construction of a coal-fired power station adjacent to the Boikarabelo mine to supply power to the South African grid, Resource Generation said.

CESC officials could not contacted on the development.

The proposed power station would use around half the additional domestic coal, thereby underpinning plans to develop Stage 2 of production from the mine and maximise export coal output, the Australian company said.

As per new terms, the first phase of coal purchases will be for 73 million tonnes and start in late 2013 when the South African mine begins production, while the remaining 66 million tonnes will begin in the second phase of the mine's expansion.

"The price of each shipment will be based on the international market price at the time," Resource Generation said.

Kolkata-based CESC has a power generation capacity of 1,225 MW and aims to raise capacity to 7,000 MW in the next six years.