RPG firm buys 10% in Aussie coal company

The RPG Group-promoted Integrated Coal Mining Ltd, an affiliate company of power producer CESC Ltd, has acquired 10 per cent stake in Resource Generation (RG), an Australian coal mining company, for $10.5 million (Rs 45 crore).

Integrated Coal Mining will purchase a million tonnes of thermal coal per annum for three years and two million tonnes per annum for a further 17 years from RG’s Boikarabelo mine in South Africa. RG has agreed, it said in a statement, to place 18,268,053 shares with Integrated Coal Mining at a share price of $0.575.

RG is a public company dual-listed on the Australian and Johannesburg stock exchanges, with coal mining assets in Tasmania in Australia and in South Africa. It also has uranium exploration projects in central-west Africa’s Cameroon.

CESC is India’s third largest power utility, with an installed generating capacity of 1,225 Mw. It serves nearly 2.5 million consumers across Kolkata and Howrah. It is increasing this generating capacity to 5,745 Mw. Its officials could not be spoen to for their views.

The coal purchases will begin when the Boikarabelo mine commences production, scheduled for early 2013. The price will be agreed annually, based on the international benchmark price at the time. The mine is in the Waterberg region of South Africa, one of the country’s largest remaining coal deposits It is estimated to have 603 million tonnes of reserves, about 40 per cent of South Africa’s untapped coal mines, according to RG.