OREANDA-NEWS. July 25, 2012. Tata Power, India’s largest integrated power utility, today announced that it has signed a long term coal supply agreement with PT Antang Gunung Meratus (AGM), a 100 percent subsidiary of the Indonesian company PT Baramulti Sukses Sarana (BSSR). Further, in order to secure the coal supplies, the company, through its 100 percent subsidiary Khopoli Investments (KIL), has also entered into an agreement which gives KIL an option, subject to necessary approvals, to take up to a 26 percent stake in BSSR. AGM and BSSR own approximately one billion tonnes of coal resources in south and east Kalimantan in Indonesia.

Speaking on the development, Anil Sardana, managing director, Tata Power, said "As a strategy to support our growth agenda, we are happy to have signed this coal supply agreement. It would support our upcoming power projects based on imported coal to be developed over the next five years."

Tata Power’s existing Indonesia presence includes 30 percent equity stakes in two major Indonesian thermal coal producers, PT Kaltim Prima Coal and PT Arutmin Indonesia, and a related trading company owned by PT Bumi Resources Tbk. As part of the purchase, Tata Power has signed an offtake agreement which entitles it to purchase about 10 million tonnes of coal per annum.

Additionally, a consortium comprising of Tata Power, Origin Energy and PT Supraco is developing a geothermal project in Indonesia with approximately 240MW of generation capacity.