Nalco zeroes in on 2 coal suppliers for Indonesian project

National Aluminium Company, or Nalco, has shortlisted MEC Coal and Bumi Murau Coal for supplying coal to its $4-billion Indonesia aluminium smelter project, according to a senior company official.

The state-owned company had floated a tender in September and four companies — MEC Coal, Bumi Murau Coal, Energy Indonesia and Pram Dwi Jaya — had submitted their bids.

B L Bagra, director (finance), Nalco, told Business Standard that while MEC fully qualified for the deal, Bumi qualified on most of the critical criteria. According to him, the benchmark criteria to bid for the Indonesian project included minimum coal reserves of 500 million tonnes, infrastructural approvals, land must have been acquired and mining experience.

Nalco plans to set up a 0.5-million tonne per annum aluminium smelter and a 1,250 megawatt power plant in Indonesia. Bagra said the company had sought more informations from Bumi. “Once they do that, we will begin the discussion on commercial terms with the two and finally choose one for the coal supply.”

Nalco is also looking to offer some stake in the project to the final partner, provided the coal supplier offers stake in the coal mine to it, according to him.

“One of the options for stake offer, which is part of the commercial negotiations, is that how much stake these coal companies can offer us in their coal mines? If they offer us ‘x’ percentage, we are ready to offer the same percentage in our power plant also. It depends upon how the commercial negotiations pan out,” he said.