Concerns loom over Tata Power's Indonesia mining lease, say analysts

Tata Power, through its subsidiaries, holds 30 per cent stake in PT Kaltim Prima Coal and a 26 per cent stake in PT Baramulti Suksessarana Tbk mines in Indonesia

Private power producer Tata Power faces concerns over its mining leases in Indonesia, as licences come for medium-term renewal. The company, however, has assured analysts there would be no material impact on its coal profitability.

“The coal mining contract of a relatively small Indonesian contractor (Tanito Harum, with 2-5 million tonnes per annum production) was revoked earlier this month. This has raised the perceived risk of a similar rejection for other coal producers with mining contracts coming up for renewal in the medium term,” analysts with JPMorgan wrote in a July 25 note on Tata Power.

Tata Power, through