PTC set to enter coal imports business

PTC India, the country's leading power trading company, has firmed up plans to source coal for power projects. It will start with two projects with a total capacity of 500 Mw.

"This will boost power project developers who are not able to secure coal supplies. We plan to enter into long-term tie-ups with mining companies for sourcing coal and delivering it for thermal power projects in the country," a company executive said. The company is in the process of floating a subsidiary for the venture. "Imported coal will be increasingly used in future power plants," he added.

However, the plan's success will depend on the price at which the company is able to source coal from abroad, as it is a high-volume low-margin business.

The PTC, however, is confident and has been approached for coal by a number of power project developers. It is ready to work on thin margins and is studying the viability of sourcing coal from Indonesia, Australia and South Africa.

Given the targets for power generation, the company believes imported coal will play a bigger role in upcoming projects as the amount of coal mined in the country is insufficient to meet the demand of existing projects due to supply constraints and quality issues.

The size of the market for imported coal for power generation in India is pegged at around 20 million tonnes. When the PTC enters the business, it will have to slug it out with coal and oil group LLC Dubai, Adanis, Minerals and Metals Trading Corporation and Swiss Singapore among others.