National Thermal Power Corporation ( NTPC ) is likely to exit from its coal special purpose vehicle (SPV) International Coal Ventures Private Limited (ICVL), reports CNBC-TV18 quoting sources.
IVCL — formed in May, 2009 jointly by Steel Authority of India Ltd (SAIL), NTPC, Coal India Ltd (CIL), Rashtriya Ispat Nigam Ltd (RINL) and National Mineral Development Corporation (NMDC) — has a capital base of about Rs 10,000 crore and enjoys the powers of a navaratna company. The SPV aims to secure about 500 million tonnes of metallurgical coal reserves by 2019-20.
Ever since its formation, the SPV has not been able to acquire any overseas coal assets either through bids or through takeovers.
Sources tell CNBC-TV18 that NTPC has made an exit case to power ministry on September 19. It has a 14% stake in the joint venture.
NTPC requires thermal coal for firing its power plants and SAIL needs coking coal for steel-making. The availability of coking coal is more compared to thermal coal and therefore, more beneficial to steel companies.
At the same time, NTPC is also sourcing coal on its own.
"NTPC has made a presentation to the (Power) Ministry stating that the coal requirement of NTPC and steel companies like SAIL and RINL are different... NTPC needs thermal coal and RINL coking coal, there is a clash of interest," a Power Ministry official said.
The power ministry will take a call on the matter in a week's time and Cabinet approval for NTPC's exit will be sought.
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